NZD/USD drops to 0.6440 as Business NZ PMI skids into contraction with multi-year low
|- NZD/USD declines to 0.6440 after Business NZ PMI slipped into contraction for the first time since 2012.
- The latest comments from Trump, Fed’s Kashkari and RBNZ’s Orr also play their roles.
With the latest manufacturing activity data from New Zealand flashing worrisome signs, NZD/USD drops to 0.6440 during the early Asian session on Friday.
New Zealand’s July month Business NZ PMI (Purchasing Manager Index) slipped into the contraction region for the first time since 2012 while flashing 48.2 mark versus 51.8 expected and 51.3 prior. The data came in after the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr emphasized the central bank’s forward-looking nature while also conveying low inflation expectations as the key for lower interest rates.
In a reaction, the Kiwi reversed earlier gains mainly on the statements from the US President Donald Trump and Federal Reserve policymaker Neel Kashkari.
The US President Donald Trump raised prospects of a trade deal with China while not expecting any retaliation of the US tariffs and likely progress in the September meeting. However, the latest updates from Chinese media turned him down and renew trade war fears.
Further, the President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, said he is leaning towards further rate cut and also spotted global nervous time.
Given the light economic calendar ahead, investors will now concentrate more on the trade/political news for fresh impulse.
Technical Analysis
Sellers can keep targeting 0.6420, 0.6400 and the latest low surrounding 0.6375 unless the quote rallies beyond May month low near 0.6480, which if broken could trigger fresh upside.
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