The New Zealand dollar slumped against its most-traded rivals today. The likely reason for the significant drop was news from China as domestic fundamentals looked good, giving the currency no reason to decline.
China lowered its target for economic growth from 6.5% to a more flexible range of 6.0%-6.5%. The news was considered an evidence that the trade war with the United States had a tremendous negative impact on the Chinese economy. Indeed, Chinese Premier Li Keqiang said:
Economic and trade frictions … had an adverse effect on the production and business operations of some companies.
Adding to the evidences of economic troubles, the Caixin China Services PMI dropped to 51.1 in February from 53.6 in January, indicating that growth of the services sector slowed significantly.
As for news from New Zealand itself, the ANZ Commodity Price Index rose 2.8% in February from the previous month after increasing 2.0% in January. Dairy prices were the main contributor to the increase.
NZD/USD dropped from 0.6825 to 0.6790 as of 14:02 GMT today. EUR/NZD gained from 1.6609 to 1.6683. NZD/JPY declined from 76.26 to 75.98.
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