NZD/USD edges lower toward 0.6600 ahead of US PMI data
- NZD/USD slides on Friday as markets turn risk-averse.
- US Dollar Index fluctuates in tight range below 95.00.
- Markit PMI data expected to show expansion in US manufacturing activity.
The China-proxy NZD struggled to find demand on Thursday and started the last day of the week on the back foot amid escalating US-China geopolitical tensions. As of writing, the NZD/USD pair was down 0.2% on the day at 0.6618.
Eyes on US-China headlines, PMI data
China announced on Friday that it shut down the US consulate in Chengdu in retaliation to the US' closure of China's consulate in China. Additionally, US Secretary of State Mike Pompeo said China walked away on its promises on Hong Kong and called upon the free world to triumph over that "new tyranny."
Meanwhile, the data published by Statistics New Zealand showed that the trade deficit narrowed slightly from $1.29 billion to $1.2 billion on a yearly basis in June but was largely ignored by the market participants.
Although market sentiment remains sour with major European equity indexes posting heavy losses, the greenback is having a difficult time erasing its losses against its rivals. Pressure by the sharp drop witnessed in the US Treasury bond yields, the US Dollar Index (DXY) closed the fifth straight in the negative territory on Thursday.
Ahead of the IHS Markit's flash PMI data, which are expected to show that the economic activity in the US manufacturing and the service sector expanded in July, the DXY is staying flat on the day near 94.81.
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.
