NZD/USD drops below 0.6100 ahead of US PMI data
- Trading action turns subdued during the European session.
- US Dollar Index drops below 99 on Friday.
- Coming up: Markit and ISM Manufacturing PMI data from US.
After rising toward the 0.6200 handle on Thursday, the NZD/USD pair erased its daily gains to close flat at 0.6126. The pair continued to edge lower during the Asian trading hours on Friday and was last seen trading at 0.6080, down 0.72% on the day. The lack of significant macroeconomic data releases caused the kiwi to react to the market sentiment, which turned negative during the first half of the day.
With major European economies staying closed due to the Labour Day holiday, the pair is trading in a very tight range ahead of the American session.
Eyes on US PMI data
In the second half of the day, the IHS Markit and the ISM will release the Manufacturing PMI data for April. Markets expect the ISM's PMI to drop to 36.9 in April from 49.1 in March. If the reading shows a contraction in the sector at a stronger pace than anticipated, the USD could find demand as a safe haven and look to end the week on a strong footing.
Ahead of these data releases, the US Dollar Index is posting small daily losses a little below the 99 handle. Construction Spending will be featured in the US economic docket as well but is unlikely to receive a market reaction.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
