NZD/USD extends gains on upbeat data from New Zealand, China, holds ground above 0.5970

• NZD/USD experienced gains due to New Zealand’s better-than-expected consumer confidence and China’s upbeat PMI.
• Traders turn cautious ahead of US data, seeking fresh impetus on the country's economic scenario.
• US Dollar (USD) experienced upward support due to the upbeat US Core PCE and Jobless Claims.

NZD/USD extends its gains on the second day, trading higher around 0.5970 during the Asian session on Friday. The pair is experiencing upward support due to upbeat data releases of New Zealand’s ANZ – Roy Morgan Consumer Confidence and China’s Caixin Manufacturing PMI for August.

The macroeconomic data revealed on Friday reinforced the support to underpin the strength of the Kiwi pair. Consumer confidence in New Zealand’s economic activity improved to the reading of 85 from 83.7 prior. Along with this, the Chinese PMI report posted a reading of 51.0, a better-than-expected 49.3, from the previous 49.2 figure.

However, the market participants will take a cautious stance ahead of the releases of employment and manufacturing data from the United States (US) before making fresh bets on the NZD/USD pair. These datasets include the US Average Hourly Earnings, Nonfarm Payrolls and ISM Manufacturing PMI.

The Greenback is gaining ground due to the moderate US data released on Thursday. The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against the six other major currencies, trades higher around 103.60 at the time of writing.

The US Federal Reserve’s (Fed) preferred gauge of inflation, the US Core Personal Consumption Expenditures (PCE) - Price Index (MoM) rose to 4.2% in July as per the market consensus, from 4.1% prior. US Initial Jobless Claims for the week ending on August 25, reported the figure of 228K against the expectations of 235K and the previous 232K.

Furthermore, Nicola Willis holds the position of finance spokesperson for New Zealand's primary opposition party. During an interview with Bloomberg TV, Willis conveyed that if their party were to come into power, they would expeditiously eliminate the employment mandate from the Reserve Bank of New Zealand, retaining only the inflation mandate. Willis stated this “would build confidence that the Reserve Bank will be focused on that inflation mandate”.