NZD Weakens Ahead of China PMI Data Release Amidst Hawkish FOMC Tone

The New Zealand Dollar (NZD) has weakened ahead of China's PMI data release. The ANZ-Roy Morgan Consumer Confidence Index jumped 8 points to 99.3 in July, its highest level since February, but remains below its January peak.

Broad economic expectations for the year ahead improved, rising from -23% to -13%, and a 5-point gain was seen in the five-year outlook to +12%. Strategists at Brown Brothers Harriman note that NZD has continued to firm against major currencies despite underperforming peers in bonds.

The NZD/USD pair depreciated as the US Dollar strengthened, defying easing risk aversion due to diplomatic developments. The FOMC press conference tone was hawkish, with a 7/10 FXS Speechtracker score above the historical average and emphasizing the 'only one target' of 2% inflation.