The NZD/USD pair reversed its three-day losing streak, trading around 0.5850 during the Asian session on Friday. The New Zealand Dollar (NZD) had been under pressure following weaker-than-expected domestic data, with New Zealand’s Business NZ Performance of Manufacturing Index (PMI) dropping to 45.8 in October, down from a revised 47.0 in September. This marked the lowest PMI reading since July 2024, signaling a slowdown in the manufacturing sector.
Despite the domestic weakness, the NZD managed to hold gains, supported by mixed economic data from China, New Zealand’s key trading partner. China’s Retail Sales rose by 4.8% year-over-year in October, surpassing expectations of 3.8% and improving from the 3.2% increase seen in September. Industrial Production also posted a 5.3% year-on-year growth, slightly below the forecasted 5.6% but still higher than the previous month’s 5.4% rise.
In its economic outlook, China’s National Bureau of Statistics (NBS) noted an improvement in consumer expectations, and the government is expected to intensify policy measures to stimulate domestic demand, citing the positive effects of recent policies on the economy.
Meanwhile, the US Dollar (USD) remains firm, hovering near its 2024 highs. The US Dollar Index (DXY), which tracks the currency’s performance against a basket of six major currencies, remains around 107.00—close to its highest level since November 2023.
Market focus now shifts to the release of US October Retail Sales data later on Friday, along with comments from Federal Reserve officials. On Thursday, Fed Chair Jerome Powell indicated that the strong performance of the US economy gives the central bank flexibility to ease rates gradually, further supporting the USD’s strength.
For now, the NZD/USD pair is navigating mixed economic signals, with continued USD strength weighing on the New Zealand Dollar, though a rebound could be possible depending on the upcoming data and global market sentiment.
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