NZ dollar falls against greenback

NZ dollar falls against greenback, holds gains against Aussie ahead of RBA

By Rebecca Howard

July 2 (BusinessDesk) - The New Zealand dollar fell as the greenback strengthened but remained firm against the Aussie ahead of the Reserve Bank of Australia's rate decision later today.

The kiwi was trading at 66.73 US cents at 7:40 am in Wellington from 67.09 cents at 5pm yesterday. It was at 95.82 Australian cents from 95.76 cents and the trade-weighted index was at 72.91 from 73.09.

The US dollar got a lift on data showing that manufacturing activity there expanded in June. While the Institute for Supply Management said its manufacturing index slipped to 51.7 from 52.1 in May, it was above expectations for 51.0.

ANZ Bank FX/rates strategist Sandeep Parekh said the data was a "relief to some as key state-level PMIs suggested a much weaker outrun was on the cards."

He also noted that respondents frequently cited tariffs as an issue but "with talks now back on with China and the Mexican issues resolved there’s a chance sentiment improves from here."

Markets will now be looking to US factory orders and labour market data for a steer on where interest rates might go. ANZ Bank is expecting the Federal Reserve to cut rates two times in the second half of the year.

Meanwhile, the market remains focused on the Reserve Bank of Australia's rate decision later today. Analysts are expecting a 25 basis-point rate cut to 1.0 percent.

Domestically, the New Zealand Institute of Economic Research's quarterly survey of business opinion will garner attention. "If the latest ANZ business outlook survey is anything to go by, businesses remained downbeat in 2Q and activity measures were lacklustre," said Parekh.

Last week, ANZ Bank's business outlook survey showed a net 38.1 percent expect general business conditions will deteriorate during the coming year, compared with 32 percent in May and 37.5 percent in April.

The New Zealand dollar was trading at 52.79 British pence from 52.81. It was unchanged at 59.10 euro cents and traded at 72.36 yen from 72.59, and at 4.5701 Chinese yuan from 4.5842.

(BusinessDesk)

ends

© Scoop Media