NZD Weakens Amid Chinese Economic Slowdown, USD Gains Momentum
The New Zealand Dollar (NZD/USD) weakened on Friday to around 0.5860, down 0.33% on the day, as investors reacted to disappointing Chinese business activity data.
China's official NBS Manufacturing Purchasing Managers Index (PMI) fell to 49.2 in July from 50.3 previously, missing the market consensus of 50.
The Non-Manufacturing PMI also declined to 49 from 50.2, indicating a broader slowdown in economic activity. This news overshadowed more encouraging developments in New Zealand, where the ANZ-Roy Morgan Consumer Confidence Index rose by eight points to 99.3 in July, its highest level since February.
Meanwhile, the US Dollar (USD) regained momentum as investors continued to price in the possibility that the Federal Reserve may keep monetary policy restrictive for longer. Markets still see another rate hike as a possibility, supported by persistent inflation concerns, with a 65% chance of a 25-basis-point interest rate increase at the September meeting.