New Zealand dollar holds above US$0.61

Daily Currency Update

The New Zealand dollar is slightly weaker this morning when valued against the Greenback currently trading at 0.6118 at the time of writing. The NZD/USD pair extends downside during the Asian session on Friday. The firmer Greenback and weaker New Zealand PMI data exert some selling pressure on the pair. New Zealand manufacturing has remained in contraction for 15 consecutive months, which undermines the New Zealand dollar (NZD). Early Friday, Business NZ showed that the nation’s Performance of Manufacturing Index (PMI) contracted to 47.2 in May from the previous reading of 48.9. ANZ analysts expect the weaker economic data would suggest the Reserve Bank of New Zealand (RBNZ) to cut the Official Cash Rate (OCR) sooner than previously signaled, with expectations for rate cuts starting in February 2025. Looking ahead this week on the data front and today we will see the release of the Business NZ Services Index a survey of purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. On Tuesday we will see the release of the Westpac Consumer Sentiment which is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. On Wednesday Statistics New Zealand will release the latest current account figures which are directly linked to currency demand. A rising surplus indicates that foreigners are buying more of the domestic currency to execute transactions in the country.  Finally, on Friday we will see the release of the quarterly Gross Domestic Product (GDP). It's the broadest measure of economic activity and the primary gauge of the economy's health.