• NZD/USD recovers swiftly from 0.5910 as the US Dollar corrects.
• The US Dollar weakens after mixed US S&P flash PMI for July.
• China’s dismal economic prospects and increased RBNZ rate-cut bets have weighed on the New Zealand Dollar.

The NZD/USD pair recovers sharply after plunging to near 0.5910 in Wednesday’s American session. The Kiwi asset bounces back as the US Dollar (USD) corrects sharply after mix United States (US) S&P Global flash PMI data for July. The Manufacturing PMI surprisingly contracted, while the Services PMI expanded at a faster pace. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, declines from a fresh weekly high of 104.50.

Despite a decent recovery in the Kiwi asset, its near-term outlook remains vulnerable. The New Zealand Dollar (NZD) has delivered a negative closing against the US Dollar for four trading sessions in a row till Tuesday. Though the major has bounced back it is still in losses.

The Kiwi dollar has remained under pressure due to growing speculation that the Reserve Bank of New Zealand (RBNZ) will begin reducing interest rates this year. The expectations for early rate cuts have been prompted by easing price pressures. In the second quarter, inflationary pressures grew at a slower pace of 0.4% from the estimates and the former release of 0.6%. Annually, the price index has decelerated sharply to 3.5%.