NZD/USD gathers strength above 0.5600 as Chinese Services PMI rises to seven-month high

• NZD/USD gains traction to around 0.5620 in Monday's Asian session. 
• China's Caixin Services PMI rose to 52.2 vs. 51.5 prior, stronger than expected. 
• The hawkish remarks from the Fed could underpin the USD and create a headwind for the pair. 

The NZD/USD pair attracts some buyers to near 0.5620 on Monday during the Asian trading hours on Monday. The New Zealand Dollar (NZD) strengthens after the Chinese Caixin Services Purchasing Managers Index (PMI) data for December. 

China's services activity expanded at a faster pace in December, with the Caixin Services PMI rising to 52.2 from 51.5 in November. This reading came in stronger than the expectation of 51.7. The Kiwi edges higher in an immediate reaction to the upbeat Chinese economic data. 

Additionally, the People's Bank of China (PBOC) said over the weekend that it will use new tools to provide liquidity to the stock market and reaffirmed its commitment to lower interest rates and the reserve requirement ratio for banks "at an appropriate time" to promote growth. The supportive measures from China boost the Kiwi, as China is a major trading partner for New Zealand. 

However, the upside for the pair might be limited amid the potential tariff threats by US President-elect Donald Trump. Trump said that he would charge China an additional 10% tariff, above any additional tariffs, after being inaugurated on January 20. The uncertainty and instability in the Chinese economy could weigh on the China-proxy New Zealand Dollar (NZD) as China is a major trading partner for New Zealand.

The US Federal Reserve (Fed) Chair Jerome Powell was suitably hawkish at the December meeting, which has provided some support to the Greenback. However, the decisions remain data-dependent, and a slew of important December data points this week could offer some hints about the interest rate outlook this year. The Federal Open Market Committee (FOMC) Minutes will be published on Wednesday. Later on Friday, the US December labor market data will be closely monitored, including the Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings.