NZD Weakens as Mixed US Data Weighs Ahead of RBNZ Decision

The New Zealand Dollar (NZD) weakens against the US Dollar (USD) on Tuesday, falling to around 0.5900 due to a mixed bag of US economic data and upcoming RBNZ monetary policy decision.

The Institute for Supply Management's (ISM) Manufacturing Purchasing Managers Index (PMI) dropped to 54.6 in August from 55.6 in July, below market consensus. However, the indicator remains above 50, indicating continued expansion of US manufacturing activity at a slower pace.

Analysts at ING expect the Reserve Bank of New Zealand (RBNZ) to hike interest rates by 25 basis points tomorrow, but warn that the NZD's reaction will depend on whether the RBNZ includes firmly hawkish guidance in its statement and updates its rate/economic projections.