NZD/USD Struggles Near 0.5750 After Weak New Zealand PMI Data
The NZD/USD pair stayed weak on Friday, trading close to 0.5750 during the Asian session. This was the fourth day in a row that the New Zealand dollar fell against the US dollar.
The latest Business NZ Manufacturing PMI for September came in at 49.9, showing a small decline in factory activity. Any reading below 50 means the manufacturing sector is shrinking, which added pressure on the Kiwi dollar.
The Reserve Bank of New Zealand (RBNZ) also cut interest rates by 50 basis points, bringing the Official Cash Rate (OCR) to 2.50%, its lowest since July 2022. The larger-than-expected rate cut made traders believe that another small cut could happen in November.
Meanwhile, the US dollar stayed stronger as investors became cautious about a possible US government shutdown and political tensions in Washington. But comments from the Federal Reserve suggesting that inflation is easing have kept rate cut hopes alive.
Impact:
The NZD/USD pair might remain weak for now, but it could recover slightly if the Federal Reserve stays dovish or global risk mood improves.