NZD/USD rises to near 0.5900 following Building Permits, China's Manufacturing PMI data

• NZD/USD appreciates as seasonally adjusted Building Permits rose 5.4% MoM in July, swinging from a previous decline of 6%.
• China's Caixin Manufacturing Purchasing Managers' Index climbed to 50.5 in August from 49.5 in July.
• The US Dollar weakens as markets increase bets on a Federal Reserve rate cut in September.

NZD/USD extends its gains for the third successive session, trading around 0.5900 during the early European hours on Monday. The pair appreciates as the New Zealand Dollar (NZD) holds gains following the release of seasonally adjusted Building Permits, which rose 5.4% month-on-month in July, following a previous decline of 6%.

Additionally, the New Zealand Dollar also gained support from a private survey indicating that China's manufacturing sector unexpectedly returned to growth in August. The Caixin Manufacturing Purchasing Managers' Index (PMI) rose to 50.5 in August from 49.5 in July. It is worth noting that any change in the Chinese economy could influence NZD as China is a close trading partner of Australia.

The NZD/USD pair also surges as the US Dollar (USD) struggles amid rising bets of an interest rate cut by the US Federal Reserve (Fed) in the September meeting. Traders are likely to await a slew of labor market releases this week that could shape the US Federal Reserve's (Fed) policy decision in September. Key reports include ADP Employment Change, Average Hourly Earnings, and Nonfarm Payrolls for August.

San Francisco Fed President Mary Daly said on Sunday that policymakers will be ready to cut interest rates soon, adding that inflation stemming from tariffs will likely prove temporary, per Bloomberg. Traders are now pricing in more than 87% of a 25 basis points (bps) rate cut by the Fed at the September policy meeting, up from an 84% chance a week ago, according to the CME FedWatch tool.

CNN reported on Friday that the US Court of Appeals for the Federal Circuit upheld a ruling that the sweeping tariffs the US President Donald Trump unilaterally imposed on most other countries were illegal. The decision impacts Trump's so-called "reciprocal" tariffs on most nations across the globe, including additional levies placed on China, Mexico, and Canada.

However, US Trade Representative Jamieson Greer said in a Fox News interview on Sunday that US President Donald Trump's administration will likely continue negotiations with its trade partners despite the US court ruling.