New Zealand dollar trades back above 59 US cents

Daily Currency Update

The Kiwi dollar is slightly stronger this morning when valued against the Greenback. The Kiwi dollar extended its gains for the third trading session, trading higher around 0.5930 during the Asian session on Monday as a result of the retreat in the US dollar. This NZD/USD pair is experiencing upward support due to the reduced likelihood of the US Federal Reserve (Fed) maintaining unchanged interest rates in the upcoming September meeting.

On the local data front New Zealand’s Manufacturing Sales for the second quarter improved to 2.9% versus a 2.1% drop in the previous reading, Statistics New Zealand reported last week. Additionally, the ANZ Commodity Price for August fell to 2.9% from a 2.6% drop in July. The nation’s Terms of Trade Index improved to 0.4% in the second quarter, compared to a decline of 1.5% in the previous reading and an expected drop of 1.3%. The NZD/USD pair is currently trading at 0.5918 at the time of writing.

Looking ahead today, Statistics New Zealand will release the monthly Visitor Arrivals. Tourism plays an important role in the economy, about 7% of the population is employed by the tourism industry, and a sizable portion of the nation's GDP is indirectly related to tourism. On Wednesday we will see the release of the Food Price Index (FPI) for the month. Although food is among the most volatile consumer price components, this indicator garners some attention because New Zealand's major inflation data is released on a quarterly basis.

Finally, on Friday we will see the release of the BusinessNZ Manufacturing Index which is a survey of manufacturers that asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.