NZD/USD is holding steady as traders await key economic data from the United States (US). The Business NZ Manufacturing PMI dropped to 41.1 in June, marking the 15th consecutive month of contraction. In the US, the Consumer Price Index declined by 0.1% MoM in June, reaching its lowest level in over three years.
The NZD/USD pair is hovering around 0.6100 in early European trading hours on Friday, reacting to New Zealand’s weak PMI data. The Business NZ Manufacturing PMI fell to 41.1 in June from 47.2 in May, marking the 15th straight month of contraction. Traders are also looking out for the Michigan Consumer Sentiment Index and the US Producer Price Index (PPI) for further insights into the US economy.
The softer-than-expected US Consumer Price Index (CPI) data for June has raised expectations of a potential Federal Reserve (Fed) rate cut in September. The core CPI rose by 3.3% year-over-year in June, slightly below expectations. Federal Reserve Bank of Chicago President Austan Goolsbee indicated that the US economy is on track to achieve 2% inflation, hinting at a possible interest rate cut in the future.
The Reserve Bank of New Zealand (RBNZ) maintained its cash rate at 5.5% as expected but suggested potential rate cuts in August if inflation declines. This dovish stance may put pressure on the New Zealand Dollar (NZD). Overall, the performance of the NZD is influenced by factors such as the health of the New Zealand economy, central bank policy, Chinese economy, dairy prices, interest rates, and macroeconomic data releases.