• NZD/USD maintains its position following the release of China’s Trade balance data on Monday.
• China’s Trade Balance increased to CNY 732.7 billion in August, compared to CNY 705.18 billion in the prior month.
• Softer-than-expected August US jobs data strengthened expectations of Fed rate cuts.

NZD/USD holds ground around 0.5900 during the Asian hours on Monday, following China’s Trade Balance data, which rose to CNY 732.7 billion in August, up from CNY 705.18 billion previously. Exports rose 4.8% year-over-year in August, against 8% in July. Meanwhile, imports advanced 1.7% YoY against 4.8% recorded prior.

In US Dollar (USD) terms, China’s Trade Surplus expanded more than expected in August. Trade Balance arrived at +102.33B against +99.2B expected and +98.24B prior. Exports YoY grew 4.4% against 5% expected and 7.2% last. The annual imports rose 1.3% against 3% expected and 4.1% previous. It is worth noting that any change in the Chinese economy could impact the NZD as New Zealand and China are close trading partners.

Additionally, the NZD/USD pair appreciates as the US Dollar (USD) faces challenges amid rising United States (US) Federal Reserve (Fed) rate cut bets, following weaker-than-expected jobs data for August.

The US Bureau of Labor Statistics (BLS) reported on Friday that the US Nonfarm Payrolls (NFP) rose by 22,000 in August, falling short of the market expectations of 75,000. This figure followed the 79,000 increase (revised from 73,000) recorded in July. Meanwhile, the Unemployment Rate increased to 4.3% August, as expected, against the 4.2% prior.

The CME FedWatch tool indicates a pricing in 92% of a 25-basis-point (bps) rate cut by the Fed at the September policy meeting, up from 86% a week ago, with bets rising on a potential 50 bps reduction this month.