NZD/USD holds positive ground below 0.6200 following Chinese PMI data

• NZD/USD holds positive ground near 0.6185, up 0.44% on the day. 
• The Core PCE, the Fed’s inflation gauge, fell to its lowest level since the spring of 2021.
• Chinese Caixin Manufacturing PMI climbed to 50.7 in November vs. 49.5 prior.
• Traders will monitor US ISM Manufacturing PMI, Fed Chair Jerome Powell’s speech on Friday.

The NZD/USD pair drifts higher to 0.6185 during the early Asian session on Friday. The pair trades in positive territory for the third consecutive week, bolstered by the weaker US Dollar (USD) and the stronger Chinese PMI data. However, the 100-day Exponential Moving Average at 0.6200 on the weekly chart might cap the upside of NZD/USD.

According to data published Thursday, the Core Personal Consumption Expenditures Price Index, which excludes volatile gas and food prices, climbed 0.2% MoM and 3.5% YoY in October. The Federal Reserve’s preferred inflation gauge fell to its lowest level since the spring of 2021. 

Signs of cooling demand boosted the anticipation that the Fed's rate-hiking cycle was coming to an end. Policymakers hinted on Thursday that rate hikes were likely done, but pushed back the expectations of a rate cut.

On Wednesday, the Reserve Bank of New Zealand (RBNZ) maintained the Official Cash Rate (OCR) at 5.50%, as widely expected. However, the forecast peak OCR was raised from 5.59% to 5.69%, and the RBNZ is likely to cut the rate for the first half of 2025, which is a bit later than previously estimated. 

New Zealand’s Roy Morgan Consumer Confidence Index rose 4 to 91.9 in November from 88.1 in the previous reading. Despite the improvement, retailers continue to face substantial headwinds due to declining consumer spending and pessimistic sentiment.

Elsewhere, the latest data on Friday showed that the Chinese Caixin Manufacturing PMI improved to 50.7 in November from 49.5 in the previous month, stronger than the market expectation of 50.7. That being said, the upbeat Chinese data could boost the New Zealand Dollar (NZD) as China is its major trading partner.

Moving on, market players will focus on the US ISM Manufacturing PMI for November. The figure is estimated to climb to 47.6 from 46.7. Additionally, Fed Chair Jerome Powell and Fed's Goolsbee are set to speak and might offer some hints about further monetary policy paths. Market players will take cues from these events and find trading opportunities around the NZD/USD pair.