New Zealand Pmi Data Is Weak, NZD/USD Extends Losses To Around 0.6150

NZD/USD extended losses to around 0.6155 during Asian session on Friday. A stronger USD and weak New Zealand PMI data put some selling pressure on the pair. The preliminary report on the University of Michigan Consumer Sentiment Index will be released later on Friday. In addition, Chicago Fed President Austan Goolsbee will speak.

The US Federal Reserve said it will cut the key interest rate by 25 basis points (bps) by the end of the year, which boosted the US dollar (USD). Fed Chairman Powell noted that the central bank needs a “good inflation reading” before reducing borrowing costs, according to the BBC.

Regarding US data, the US Producer Price Index (PPI) rose 2.2% year-on-year in May, compared with a 2.3% increase in April, lower than the expected 2.5%. Data released by the Bureau of Labor Statistics on Thursday showed that the core Producer Price Index (PPI) rose 2.3% year-on-year in May, lower than the consensus value and the previous value of 2.4%. Meanwhile, initial jobless claims in the U.S. rose by 242,000 in the week ended June 6, the highest in 10 months. The figure was higher than the consensus forecast of 225,000 and higher than the 229,000 in the previous week.

In terms of the New Zealand dollar, New Zealand’s manufacturing sector has been shrinking for 15 consecutive months, which weakened the New Zealand dollar. Earlier on Friday, data released by Business NZ showed that New Zealand’s manufacturing performance index (PMI) shrank to 47.2 in May from 48.9 in the previous period. Analysts at ANZ expect that the weak economic data will suggest that the Reserve Bank of New Zealand (RBNZ) will cut the official cash rate (OCR) earlier than previously signaled, and the rate cut is expected to start in February 2025.

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