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NZD/USD rises to near 0.5750 ahead of US PPI data release
NZD/USD strengthened to around 0.5740 in early Asian trading on Thursday. The Federal Reserve's unpredictable statement on tariffs weakened the dollar.
In early Asian trading on Thursday, NZD/USD rose further to around 0.5740 amid a weakening U.S. dollar (USD). The U.S. Producer Price Index (PPI) will be in focus later on Thursday, followed by weekly initial jobless claims.
Concerns about the unpredictable trade policy of the U.S. Federal Reserve spread among investors, putting pressure on the dollar. Investors were concerned about weak U.S. economic data and huge cuts in government jobs and government spending. Goldman Sachs analysts last week raised the chances of a recession to 20% from 15%, citing policy changes as the main risk to the economy.
On the other hand, concerns about continued deflationary pressures in China, New Zealand's largest export market, weakened the New Zealand dollar. China's consumer price index (CPI) in February missed expectations and fell at the fastest pace in 13 months, while producer prices continued to deflate.
“Although developments in the technology sector have improved market sentiment, the Chinese economy is still facing deflationary pressure and domestic demand remains weak,” said Zhang Zhiwei, president and chief economist at Precision Asset Management.
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