• NZD/USD trades slightly higher after weaker-than-expected US ADP employment data.
• Markets remain calm as attention shifts to US services sector indicators.
• Investors also turn their focus to China’s December Trade Balance, a key driver for the New Zealand economy.

NZD/USD trades around 0.5790 on Wednesday at the time of writing, up 0.10% on the day, supported by a mix of macroeconomic factors despite a mixed flow of news from the United States (US). The New Zealand Dollar (NZD) maintains a mildly positive bias as the US Dollar (USD) shows limited reaction to softer-than-expected private employment data.

This week, investors’ attention is focused on the release of China’s Trade Balance for December, due on Thursday. This indicator is particularly important for the New Zealand Dollar, given the strong dependence of New Zealand’s economy on exports to Beijing. An improvement in China’s external trade could reinforce expectations of demand for New Zealand commodities and agricultural products, offering additional support to the Kiwi.

On the US side, the Automatic Data Processing (ADP) Research Institute reports that private sector employment increased by 41,000 jobs in December, following a revised decline of 29,000 in November. The figure comes in slightly below market expectations of 47,000. 

According to ADP Chief Economist Nela Richardson, small businesses recovered from previous job losses at year-end, while larger firms scaled back hiring. This report limits support for the US Dollar, without triggering any significant moves in the foreign exchange market.

Meanwhile, investors remain attentive to upcoming US data releases. The ISM Services Purchasing Managers Index (PMI) for December is expected to edge lower to 52.3 from 52.6 in November, a level still consistent with solid expansion in activity. In addition, the Bureau of Labor Statistics is set to publish the JOLTS Job Openings data for November, which are expected to ease slightly to 7.6 million from 7.67 million previously. These indicators should help refine expectations regarding the future path of Federal Reserve (Fed) monetary policy.

In this context, NZD/USD continues to trade mainly on expectations related to China’s economic outlook and overall risk sentiment, while recent US data have not been sufficient to provide clear momentum for the US Dollar.