NZD under pressure again as risk off mood extends into a new week

Daily Currency Update

The New Zealand dollar tracked lower through trade on Monday, starting the new week on the back foot as markets endured another risk off run. Having pushed off lows approaching US$0.59 mid last week the NZD tested a break above US$0.60 late in the domestic session before falling steadily overnight. Weaker than anticipated Chinese PMI data from the weekend, with the Caixin manufacturing and non-manufacturing index’s missing expectations by a wide margin coupled with higher and steeper yield curves sapped investor demand for risk prompting a move away from risk assets and equities. The NZD traded toward intraday lows below US$0.5950, touching US$0.5944.
Our attention turns now to the domestic quarterly survey of business conditions. We are looking for any sign of further easing in the labour market, a downturn in capacity and inflation expectations and trading activity data as indicators of potential growth through Q3. After a surprise rebound in Q2, a solid uptick in GDP expectations could help add a floor beneath the NZD at least against key major crosses.