NZ Dollar Falls On Weak PMI Data

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Friday, after data showed that the manufacturing sector in New Zealand continued to contract in July.

Data from Business NZ showed that the manufacturing sector in New Zealand continued to contract in July, and at a faster rate, with a manufacturing PMI score of 46.3. That missed expectations for a score of 49.4 and was down from the downwardly revised 47.4 in June.

Also, data from Statistics New Zealand showed that the nation's food price index fell 0.5 percent in July, following an increase of 1.6 percent in June. It was the first monthly decline in food prices since February 2022, when it was negative 0.1 percent.

On annual basis, the food inflation slowed to 9.6 percent in July from 12.5 percent in June. This was the weakest value since September 2022, when it was 8.3 percent.

Moreover, Asian stock markets traded lower, as traders continue to digest weak data from China and remain concerned about slow economic recovery in China after reporting the first consumer price deflation in more than two years.

Meanwhile, the tamer-than-expected inflation data from the US reinforced expectations the US Fed will leave interest rates unchanged.

Crude oil prices fell from multi-month highs amid concerns about the outlook for oil demand from China after imports plummeted. West Texas Intermediate Crude oil futures for September ended down $1.58 at $$82.82 a barrel.

In the Asian trading today, the NZ dollar fell to nearly a 3-1/2-year low of 1.8302 against the euro and a 2-day low of 86.85 against the yen, from yesterday's closing quotes of 1.8231 and 87.14, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.85 against the euro and 84.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi dropped to nearly a 2-1/2-month low of 0.6003 and a 2-week low of 1.0861 from Thursday's closing quotes of 0.6021 and 1.0815, respectively. On the downside, 0.59 against the greenback and 1.11 against the aussie are seen as the next support levels for the kiwi.

Looking ahead, U.S. PPI for July, German current account data for June, U.K. NIESER GDP tracker data for July, U.S. University of Michigan's preliminary consumer sentiment data for August and U.S. Baker Hughes oil rig count data are slated for release in the New York session.