New Zealand dollar climbed to its highest point on Wednesday against its US peer, but gains seemed to remain capped due to mounting expectations that the Federal Reserve Bank will pare back its stimulus program in September.
NZD/USD rose to a session high at 0.7866 at 8:05 GMT, after which consolidation followed at 0.7864, gaining 0.78% for the day. Support was expected to be received at September 2nd low, 0.7756, while resistance was to be met at August 6th high, 0.7918.
It became clear that activity in Chinese sector of services rose to the highest level in five years. HSBC reported that its services PMI advanced to a reading of 52.8 in the month of August, supported by a higher number of new orders. The index, gauging employment, dropped, as service providers projected continuous pressure on profits, despite the moderate increase in prices of services in August, which was the first gain during the past four months. This data gave the kiwi dollar a certain boost, as China is New Zealands second largest export partner.
In the mean time, on Tuesday the ISM manufacturing index in the United States was reported to have increased to 55.7 in August, exceeding preliminary estimates of a value of 54.0, while in July the index stood at 55.4. Also, Markit research group said that the final value of the US manufacturing PMI decreased to 53.1 in August from the initially estimated value of 53.9 in the middle of the preceding month. These data points strengthened the view of a possible reduction of scale of stimulus by the US central bank at its meeting on September 17-18th.
Later on trading Wednesday the United States was expected to release data on its trade balance.
Elsewhere, the kiwi was lower against the Australian dollar, as AUD/NZD cross gained 0.10% to trade at 1.1635 at 8:13 GMT.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
