The New Zealand dollar was extremely soft this week, and the current trading session was not an exception. The currency fell against its major peers even though economic data from New Zealand was rather positive.
Business NZ reported that the seasonally adjusted manufacturing Purchasing Managers’ Index rose from 53.5 in July to 56.5 in August. It was the strongest level in five months. The report noted that the manufacturing sector was expanding every month for the past two years.
The New Zealand currency did not react to the good news, most likely because its attractiveness was hurt by yesterday’s monetary policy announcement from the Reserve Bank on New Zealand. As was expected, the central bank kept its main interest rate at 3.5 percent, saying that “it is prudent to undertake a period of monitoring and assessment before considering further policy adjustment”. At the same time, the statement predicted that “some further policy tightening will be necessary to keep future average inflation near the 2 percent target mid-point and ensure that the economic expansion can be sustained”.
NZD/USD fell from 0.8181 to 0.8167 as of 17:02 GMT today, and its intraday low of 0.8145 was the lowest since February 4. EUR/NZD climbed from 1.5789 to 1.5886, while NZD/JPY slipped from 87.61 to 87.51.
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