NZD/USD gathers strength above 0.5900 after New Zealand's employment data

• NZD/USD attracts some buyers to around 0.5910 in Wednesday's early Asian session, up 0.10% on the day. 
• New Zealand's Q2 Unemployment Rate rose to 5.2%. 
• Weak US economic data fueled speculations that the Fed will cut the rate in September.

The NZD/USD pair edges higher to near 0.5910 during the early Asian session on Wednesday. The New Zealand Dollar (NZD) strengthens against the US Dollar (USD) after data shows New Zealand's Unemployment Rate came in better than expected. The Federal Reserve (Fed) officials are scheduled to speak later on Wednesday, including Susan Collins, Lisa Cook and Mary Daly. 

Data released by Statistics New Zealand on Wednesday showed that New Zealand's Unemployment Rate rose to 5.2% in the second quarter (Q2) from 5.1% in the first quarter. The figure came in below the market consensus of 5.3%. The Kiwi gains ground in an immediate reaction to the employment data. 

The Reserve Bank of New Zealand (RBNZ) has cut the cash rate by 225 basis points (bps) since August 2024 but paused last month to assess the impact of trade tariffs and a slight increase in inflation. Nonetheless, ongoing weakness in New Zealand's labor market will further strengthen the case for the RBNZ to cut the cash rate by 25 bps when it meets in August. This, in turn, might cap the upside for the NZD against the USD in the near term.

Rising bets that the US Federal Reserve (Fed) will resume its rate-cutting cycle in September after a slew of weak US economic data might drag the Greenback lower. Markets are now pricing in nearly a 95% chance the Fed will ease rates next month owing to the weaker-than-expected US employment data, with over 63 basis points (bps) worth of cuts expected by December, according to Reuters.