NZD/USD continues to lose ground for the third successive session, trading around 0.6200 during the Asian hours on Tuesday.
NZD/USD extends losses as traders expect that the Fed will not deliver a 50 basis points rate cut in September. Traders await the US ISM Manufacturing PMI on Tuesday ahead of upcoming US employment data. New Zealand’s Terms of Trade Index rose by 2.1% QoQ in Q2, swinging from a previous 5.1% decline. The US Dollar receives support from diminishing odds of an aggressive interest rate cut by the US Federal Reserve rate in September.
The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
Majors Macroeconomics Newzealand
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