The NZDUSD opens at 0.6673 (mid-rate) this morning.
A fall below the critical 50.0 threshold in China’s Purchasing Managers’ Index, which measures operating conditions in
the manufacturing sector, has helped erase yesterday’s NZD gains.
Yesterday afternoon’s Caixin report showed the index fell from 50.2 in May to 49.4 in June and below 50.0 for the first
time in four months. A lack of new business and a fall in international sales along with ongoing concerns about the
US-China trade dispute are the catalysts for the contraction.
The USD has pushed higher overnight after the ISM reported its Purchasing Managers’ Index declined less than forecast in
June. Although the index which now sits at 51.7, its lowest level since October 2016, economists had forecast the index
to fall from 52.1 in May to 51.0 in June, with the modest decline viewed as a positive.
The UK manufacturing sector contracted at its fastest pace in over six years in June with the IHS Markit/CIPS Purchasing
Managers' Index plummeting to 48 in June following on from May’s 49.4 reading. The result was driven by factories
reducing production due to weaker demand as Brexit-and-political uncertainty continues to damage business confidence.
This morning’s NZIER Business Confidence data release is the key driver for the NZD while this afternoon’s RBA monetary
policy statement will dictate direction for the NZDAUD cross rate. This afternoons decision has economists split between
holding rates steady with the next 25 basis point cut to come at the August meeting and pulling the trigger this
afternoon and cutting the OCR to 1.0%.
Global equity continue to push higher, - Dow +0.68%, S 500 +0.80%, FTSE +0.76%, DAX +0.90%, CAC +0.62%, Nikkei +0.58%, Shanghai +1.91%.
Gold prices have edged lower, down 0.2% trading at $1,295 an ounce. WTI Crude Oil prices continue to push higher, up 1.0% Trading at $62.30 a barrel.