Global Markets Send Mixed Signals as NZDUSD Rebound Stands Out

The latest batch of economic data paints a mixed picture across global markets. In the US, job growth stalled in August, adding little momentum to an already cooling labor market, while manufacturing continued to shrink despite a slight pickup in new orders. The services sector managed to expand for a third straight month, though employment weakness and rising costs remain concerns. In New Zealand, manufacturing stumbled in the second quarter, underscoring the sector’s vulnerability to global pressures. Meanwhile, technical signals suggest a potential rebound in NZDUSD, with bullish momentum building after recent lows.

US Job Growth Stalls in August, Weak Report Weighs on Dollar

US job growth was largely flat in August, with nonfarm payrolls adding just 22,000 positions, continuing a pattern of little change since April. The unemployment rate held steady at 4.3 percent. Health care and social assistance added jobs, but these gains were offset by declines in federal government employment, mining, oil and gas, and wholesale trade. Manufacturing also slipped, losing 12,000 jobs, partly due to strike activity in transportation equipment.

Wage growth remained steady, with average hourly earnings rising 0.3 percent in August and 3.7 percent over the year. The average workweek held at 34.2 hours. Overall, the data points to a cooling labor market, with slower hiring and stable unemployment signaling uncertainty in the broader US economy. A weaker-than-expected US jobs report like this usually pressures the US dollar because it signals slowing economic momentum and reduces expectations that the Federal Reserve will keep interest rates higher for longer.

Manufacturing Momentum Stalls as Sales Slip in Q2 2025

New Zealand’s manufacturing sector stumbled in the second quarter of 2025, with sales volumes falling 2.9 percent after rising 2.4 percent in the first quarter. The drop highlights the volatility facing the industry, as global pressures such as supply chain issues and shifting demand weigh on performance. The reversal signals growing uncertainty in the economy, and the sector may need to adapt to changing conditions if it is to regain stability in the coming months.

US Manufacturing Shrinks Again in August, but New Orders Show a Spark

US manufacturing contracted again in August, marking the sixth straight month of decline, though at a slightly slower pace than in July. The ISM Manufacturing PMI registered 48.7 percent, up from 48 percent, but still below the 50 threshold signaling contraction. New orders showed growth for the first time in six months, reaching 51.4 percent, while production slipped back into contraction at 47.8 percent. Employment also remained weak at 43.8 percent as firms continued to manage headcounts cautiously. Prices stayed elevated at 63.7 percent, though slightly lower than July. Overall, manufacturing remains under pressure, with most industries shrinking, but modest gains in new orders hint at potential stabilization ahead.

Technical Analysis

Since hitting a low of 0.57988 on August 22, NZDUSD has mounted a recovery, initially supported by a Morning Star candlestick formation and reinforced by a failure swing reversal. The higher trough at 0.58317, coupled with a breakout above 0.59134, confirms a shift in momentum to the upside.

Technical indicators strengthen the bullish case: the Momentum Oscillator has crossed above the 100 line, reflecting improved sentiment, while the RSI remains above 50, highlighting growing buying pressure. Price action is currently holding above both the 20- and 50-period EMAs, though the short-term EMA has not yet crossed above the longer one.

If this constructive setup holds, the next resistance levels are projected at 0.59639, 0.59946, and 0.60456. On the downside, key supports are located at 0.59134, 0.58317, and the August trough at 0.57988.

US Services Sector Expands in August, but Jobs Lag Behind

US services activity picked up in August 2025, with the ISM Services PMI rising to 52 percent, signaling continued expansion for the third straight month. Business activity strengthened to 55 percent, and new orders climbed to 56 percent, showing improving demand. However, the employment index remained in contraction at 46.5 percent, highlighting ongoing labor weakness, while the backlog of orders fell to its lowest level since 2009. Prices stayed elevated at 69.2 percent, pointing to persistent cost pressures. Overall, the services sector is growing, but challenges around hiring, inflation, and shrinking order backlogs suggest a mixed outlook.

Conclusion

In summary, the latest data underscores a fragile and uneven global economic environment. The US is grappling with stalled job growth, persistent manufacturing weakness, and services expansion tempered by labor shortages and rising costs. New Zealand’s manufacturing slowdown reflects broader global headwinds, while technical signals in NZDUSD hint at near-term resilience in currency markets. With growth pockets offset by structural challenges, the outlook remains uncertain, leaving policymakers and investors navigating a landscape defined by both opportunity and risk.