New Zealand Dollar Holds Near Two-Week Low
The New Zealand dollar steadies around $0.585 near a two-week low after softer manufacturing PMI and inflation expectations data revived questions over further Reserve Bank tightening.
The New Zealand dollar steadied around $0.585 but remained near a two-week low as soft economic data raised fresh questions over the extent to which the Reserve Bank may continue tightening policy.
New Zealand's manufacturing PMI fell to 54.3 in July from June's 60.1, with a majority of business comments turning negative.
This followed data showing that one-year inflation expectations fell to 2.6% from 3.4% in the previous quarter, while the two-year measure, which the RBNZ watches most closely, eased to 2.3% from 2.5%.
This signaled that inflation expectations remain contained and that there is a lower risk of higher oil prices spilling over into broader inflation.
Still, traders continue to see a high probability of a September rate hike as the central bank repeatedly stressed the need to withdraw some of its policy support.
The kiwi is down 0.6% so far this week, putting it on track to snap a two-week winning streak.