The NZD/USD pair extends its downside to near the round-level support of 0.5900 in Thursday’s European session. The Kiwi asset continues its losing spell for the sixth trading session due to multiple headwinds. Deepening China’s economic woes and increasing Reserve Bank of New Zealand (RBNZ) rate-cut bets have weakened the New Zealand Dollar (NZD).

Weak demand from domestic and the overseas market in the Chinese economy has raised concerns over global growth outlook. The Kiwi Dollar has been hit badly as the New Zealand economy is one of leading trading partners of China.

Adding to China’s economic vulnerability, growing speculation that the RBNZ could pivot to policy normalization from the August policy meeting has weakened the New Zealand Dollar. The expectations for the RBNZ to cut its key Official Cash Rate (OCR) from its current levels in August rose due to cooling inflationary 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%.

Meanwhile, the market sentiment remains risk-off with a focus on the United States (US) Q2 flash Gross Domestic Product (GDP) data, which will be published at 12:30 GMT. S&P 500 futures give up gains posted in Asian trading hours.

The US economy is estimated to have grown at a faster pace of 2.0% from the former release of 1.4% on an annualized basis. The GDP data will significantly influence the US Dollar’s (USD) outlook.

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