The New Zealand dollar dropped today, touching the lowest level in four years versus its US counterpart. The currency was dragged down by poor domestic macroeconomic data and the general risk-off sentiment on the Forex market. A positive report about China’s manufacturing sector limited the downside momentum, though.
Not all of New Zealand data was bad as the Statistics New Zealand reported that the seasonally adjusted number of building consents rose 0.8% in August. That was not a bad result, especially compared with the July drop of 1.3%.
But traders paid much more attention to the worsening business confidence. The ANZ business confidence index slid to -53.5 in September from -52.3 in August. The report said:
Investment intentions and profit expectations both fell to dismal levels. Employment intentions eked out a 1 point gain but are very low. Costs, pricing intentions, and inflation expectations were all weaker.
The Caixin China Manufacturing PMI climbed to 51.4 in September from 50.4 in August. That was a total surprise to market participants who were counting on a small drop to 50.2. The Official NBS Manufacturing PMI was not as good, showing a reading of 49.8, which indicated that the sector remained in contraction. Still, it was a better reading than August’s 49.5 and the consensus forecast of 49.6. The Official NBS Non-Manufacturing PMI slipped to 53.7 this month from 53.8 in the preceding month, missing the consensus of 53.9.
NZD/USD dropped from 0.6281 to 0.6260 as of 10:02 GMT today, and its daily low of 0.6249 was the lowest since September 2015. EUR/NZD was up from 1.7378 to 1.7442 but retreated from the daily high of 1.7504. NZD/JPY fell from 67.81 to 67.57, touching the low of 67.38 intraday.
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