NZD/USD gathers strength above 0.5850 as US job openings fall more than expected

• NZD/USD strengthens to around in Thursday's Asian session.
• US JOLTS Job Openings declined to 7.18 million in July vs. 7.4 million expected. 
• The dovish tone of the RBNZ might cap the upside for the pair.

The NZD/USD pair gains traction to near 0.5880 during the Asian trading hours on Thursday. The US Dollar (USD) weakens against the New Zealand Dollar (NZD) after economic data showed weakening labor market conditions. Traders await the US weekly Initial Jobless Claims, the ADP Employment Change and the ISM Services Purchasing Managers Index (PMI), which are due later on Thursday.

Data released by the US Bureau of Labor Statistics (BLS) on Wednesday showed that the number of job openings on the last business day of July stood at 7.181 million. This figure followed the 7.357 million (revised from 7.437 million) openings recorded in June and came in below the market expectation of 7.4 million. 

This report has supported investor expectations of US monetary policy easing by the Federal Reserve (Fed), weighing on the Greenback. Markets are currently pricing in nearly a 97.5% chance of a 25 basis points (bps) cut at the Fed's September 17 meeting, up from 91% odds before the US JOLTS Job Openings report, according to the CME FedWatch tool.

The Reserve Bank of New Zealand (RBNZ) has been aggressively cutting rates since August 2024 to counteract a fragile recovery that followed a period of aggressive tightening to combat inflation. The New Zealand central bank signaled that further cuts could be coming. 

The RBNZ's updated forecasts suggest the Official Cash Rate (OCR) could fall to around 2.5% by early 2026, indicating at least two additional cuts. This dovish stance is more aggressive than many market analysts had predicted, which might undermine the Kiwi in the near term.