The NZD/USD pair is facing selling pressure around 0.6070 in the early Asian session on Tuesday. This is due to a renewed demand for the US Dollar (USD) and a decline in New Zealand’s business activity outlook surveys. Market watchers are awaiting Federal Reserve (Fed) Chairman Jerome Powell’s speech for potential market-moving insights, followed by the Fed’s monetary policy minutes on Wednesday.
In the United States, manufacturing activity continued to contract in June, as reported by the Institute for Supply Management (ISM). The US ISM Manufacturing Purchasing Managers Index (PMI) fell to 48.5 in June from 48.7 in May, below market expectations. This data, along with last week’s US Personal Consumption Expenditures (PCE) Price Index, has fueled speculation about a potential Fed rate cut this year, leading to a decline in the Greenback.
On the Kiwi front, the New Zealand Institute of Economic Research (NZIER) reported a decline in Business Confidence in the second quarter (Q2), further pressuring the New Zealand Dollar (NZD). Additionally, there are expectations that the Reserve Bank of New Zealand (RBNZ) may cut rates sooner than anticipated, adding to the selling pressure on the Kiwi.
Overall, market dynamics and economic data releases are crucial in determining the movements of the NZD/USD pair. Investors will continue to monitor developments in both the US and New Zealand economies for further insights into the currency pair’s performance.