The New Zealand dollar fell further against the other major currencies in the Asian session on Thursday, after data showed that China’s manufacturing activity continued to contract at an accelerated pace in April, touching a 12-month low.
Data from HSBC showed that the manufacturing sector in China continued to contract in April, at an accelerated pace, with a 12-month low PMI score of 49.2. That was in line with forecasts, and its down from 49.6 in March. It also moved further beneath the boom-or-bust line of 50 that separates expansion from contraction.
The currency slid earlier after Reserve Bank of New Zealand Assistant Governor John McDermott said the bank is unlikely to consider any increase in interest rates at present.
The other Antipodean currency- the Australian dollar, also fell slightly after weaker China factory data.
Speaking at a business meeting to the Waikato Chamber of Commerce and Industry about inflation in Hamilton, John McDermott said, “Before considering any tightening in monetary policy we would need to be confident that increased capacity utilisation and labour market tightness was generating, or about to generate, a substantial increase in inflation,”.
“Evidence of weakening demand and domestic inflationary pressures would prompt us to consider lowering interest rates.”
The RBNZ is expected to keep the OCR 3.5 percent in the policy meeting on April 30.
Meanwhile, the New Zealand benchmark NZSE 50 index also fell 13.99 points or 0.24 percent at 5,779.
Wednesday, the NZ dollar showed mixed trading against its major rivals. While the NZ dollar rose against the U.S. dollar and the Yen, it held steady against the euro. Against the Australian dollar, the NZ dollar fell.
In the Asian trading today, the NZ dollar fell to 8-day lows of 0.7564 against the U.S. dollar and 1.4126 against the euro, from yesterday’s closing quotes of 0.7664 and 1.3987, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.73 against the greenback and 1.43 against the euro.
Against the yen and the Australian dollar, the kiwi dropped to 1-week lows of 90.79 and 1.0199 from yesterday’s closing quotes of 91.89 and 1.0109, respectively. On the downside, 88.70 against the yen and 1.34 against the aussie are seen as the next support levels for the kiwi.
Looking ahead, Swiss trade data for March is due to be released at 2:00 am ET.
In the European session, PMI reports for April from major European economies and U.K. public sector finance data and retail sales data for March are slated for release.
At 3:45 am ET, European Central Bank board member Peter Praet is expected to speak at the “World monetary conference” in Berlin.
In the New York session, U.S. weekly jobless claims for the week ended April 18, U.S. Markit’s manufacturing PMI for April and U.S. new home sales data for March are set to be published.
The material has been provided by InstaForex Company – www.instaforex.com