New Zealand dollar trades below 59 US cents

Daily Currency Update

The Kiwi dollar is slightly weaker this morning when valued against the Greenback. The NZD/USD pair struggles to capitalize on last week's rebound from the 59 US cent level. The Kiwi dollar is currently trading around 0.5871 and seems vulnerable to extending last week's slide from the 60 US cent psychological mark. On the data front last week the Kiwi dollar met with some selling pressure after the dismal domestic data which showed that business activity in the manufacturing sector contracted further in October. The latest Business NZ Performance of Manufacturing Index (PMI) fell significantly from 45.1 in September to 42.5 – marking the lowest level of activity for a non-COVID-affected month since May 2009. The data reaffirmed expectations that the Reserve Bank of New Zealand (RBNZ) will keep its policy rate unchanged in November.
On the local data front, this week starts with today's release of the BusinessNZ Services Index is a survey of purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. On Tuesday Statistics New Zealand will release the Food Price Index (FPI). 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. On Wednesday we will see the release of 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. Finally, on Friday we will see the release of the Producer Price Index (PPI) which is a leading indicator of consumer inflation - when manufacturers pay more for goods the higher costs are usually passed on to the consumer.