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NZD/USD Remains Rangebound Near 0.5900 As Investors Await Chinese Data
Following the release of New Zealand's Business PMI data, the NZD/USD exchange rate remains unchanged near 0.5900. Thursday's data indicated that the US economy remains resilient and that inflation rose in August. The New Zealand Business PMI decreased to 46.1 in August from 46.3 previously. The market awaits Chinese data and the US Michigan Consumer Sentiment Index.
After retreating from a weekly high of 0.5944 in the early Asian session on Friday, the NZD/USD pair trades in a range between 0.5900 and 0.5950. Ahead of the Chinese Production and Retail Sales, market participants prefer to hold off. In the meantime, the US Dollar Index (DXY), a measure of the value of the USD relative to six other main currencies, rose to 105.35, which is close to its highest daily close since March.
The economy of the United States remains resilient, and inflation rose in August. The Producer Price Index (PPI) for August increased by a greater amount than anticipated, with the annual rate increasing from 0.8% to 1.5%. The annual Core rate decreased from 2.2% to 2.2%. Additionally, August Retail Sales grew 0.6% month-over-month, exceeding expectations of 0.2% growth. The weekly Initial Jobless Claims rose by 220K from 217K, below the market consensus of 225K.
The Federal Reserve's (Fed) monetary policy expectations were not significantly altered by these figures. Next week, the markets anticipate that the Federal Reserve (Fed) will maintain its interest rate. According to the CME FedWatch Tool, the Fed will not raise rates at its September meeting, but there is a 35% chance that rates will increase in November.
Recent economic data released by Business NZ regarding New Zealand indicated that the Business NZ PMI decreased to 46.1 in August from 46.3 the previous month. This week, the Food Price Index (FPI) for August rose 0.5% month-over-month (MoM) after falling 0.5% the previous month. The nation's Electronic Card Retail Sales for August increased 3.7% year-over-year from 2.2% in the prior month, while the monthly figure increased 0.7% from 0% in the previous month.
For the time being, New Zealanders will be affected by China's economic conditions. The Chinese Retail Sales and Industrial Production will be monitored for fresh impetus by traders. The superior-than-anticipated data could bolster the NZD and provide support for the NZD/USD pair.
In the near future, market participants will keep a close watch on Chinese data, including Retail Sales and Industrial Production, scheduled to be released on Friday afternoon during the Asian session. In the United States, imminent data includes the Empire State Manufacturing Index, Industrial Production, and a survey of consumer confidence from the University of Michigan. These figures could provide guidance for the NZD/USD pair.
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