NZD slide continues as Chinese PMI data misses the mark
Daily Currency Update
The New Zealand dollar extended its precipitous fall on Wednesday, crashing through US$0.60 as equities commodities and the Chinese yuan combined to foster another break of supports. China PMI data printed below expectations as manufacturing activity slid further into contractionary territory while non-manufacturing activity continued its modest fall following a short-term post covid rebound. The miss adds to growing uncertainty surrounding China’s post covid recovery and fostered another run on the Chinese yuan while driving commodity prices lower. Copper prices closed the month down 5.5% while Brent Crude gave up 8%. With the USD pushing above 7.13 against the yuan, weakness spilled into the NZD forcing a break below US$0.60. Having touched intraday and year-to-date lows at US$0.5985, the NZD has regained some semblance of poise, clawing back above US$0.60 to buy US$0.6015 on open this morning.Having broken supports our attentions turn now to Euro area CPI inflation data and US ISM manufacturing data as key macro markers ahead of Friday’s all-important non-farm payroll print.
Key Movers
The USD dollar enjoyed mixed fortunes through trade on Wednesday, extending gains against commodity currencies and the Euro but giving up ground to the GBP and JPY. The Euro slid below 1.07, marking lows at 1.0675 following softer-than-anticipated Chinese PMI data and a surprise German and Spanish CPI update. Europe’s exposure to China as a key export market weighed on the single currency while a larger-than-anticipated fall in German and Spanish inflation markers helped lower European yields, adding more downward pressure on the currency. The GBP traded in positive territory while the JPY benefited from a broader downward correction in global rates and yields.Our attentions turn now to the Euro area CPI inflation data and US ISM manufacturing data as key macro markers ahead of Friday’s all-important non-farm payroll print.
Expected Ranges
- NZD/USD: 0.5950 - 0.6080 ▼
- NZD/EUR: 0.5580 - 0.5680 ▼
- GBP/NZD: 2.0480 - 2.0820 ▲
- NZD/AUD: 0.9180 - 0.9280 ▼
- NZD/CAD: 0.8080 - 0.8230 ▼