NZD/USD attempts a break of oscillation above 0.5800 ahead of Caixin PMI

• NZD/USD is aiming to deliver an upside break of the 17-pips consolidation ahead of Caixin PMI data.
• Chinese official manufacturing PMI remained downbeat amid zero Covid-19 policy.
• The antipodean is outperforming other risk-perceived currencies despite a pessimism in the market mood.

The NZD/USD pair has attempted a breakout after displaying back-and-forth moves in a 0.5803-0.5820 range in the early Tokyo session. The asset remained sideways from the late New York session as investors were awaiting the release of the Caixin Manufacturing PMI data for making an informed decision.

The commodity-linked currency refused to sustain below the critical support of 0.5800 on Monday and rebounded firmly unlike the other risk-sensitive currencies, which remained crippled against the greenback. Meanwhile, risk sentiment remained dampened as Federal Reserve (Fed)’s pre-anxiety period is compelling investors to hide behind safe-haven assets.

The US dollar index (DXY) advanced sharply on Monday after a breakout above the round-level hurdle of 110.00. Also, the 10-year US Treasury yields jumped to 4.05%.

As per the consensus, the Caixin Manufacturing PMI is seen higher at 49.0 vs. the prior release of 48.1. Official Manufacturing PMI which releases before the Caixin Manufacturing PMI remained downbeat on Monday. It is worth noting that New Zealand is a leading trading partner of China.

China’s official Manufacturing PMI landed lower at 49.2 vs. the projections of 50.0 and the prior release of 50.1, reported by the National Bureau of Statistics (NBS). Also, the Non-Manufacturing PMI had been recorded significantly lower at 48.7 against the expectations of 51.9 and the former release of 50.6. It seems that the continuation of the no-tolerance Covid-19 policy has weighed pressure on China’s economic activities.

Apart from that, kiwi’s labor market data will remain in focus. The Employment Change for the third quarter is seen at 0.5% against the former print of 0%. While the Unemployment Rate could trim to 3.2% vs. 3.3% released earlier. In addition to that, the labor cost index is also seen lower at 1% against the prior release of 1.3%.