NZD/USD Falls to 0.6000 After Pullback from Eight-Month Highs

NZD/USD Falls to 0.6000 After Pullback from Eight-Month Highs

NZD/USD retraces from an eight-month high of 0.6055 to trade near 0.6000 during Tuesday’s Asian session. The New Zealand Dollar loses momentum after the Q1 Terms of Trade Index growth came in at 1.9% QoQ, significantly below market expectations of 3.1%.

Export prices in New Zealand rose by 7.1%, the highest in three years, while import prices increased 5.1%, marking the largest quarterly rise in 10 quarters. Despite strong price gains, the softer terms of trade growth signals some pressure on the NZD.

The currency is also influenced by external economic data, with China’s Caixin Manufacturing PMI falling unexpectedly to 48.3 in May, indicating contraction, and below the anticipated 50.6 reading. Meanwhile, the US ISM Manufacturing PMI dropped slightly to 48.5 in May, continuing a manufacturing slowdown trend.

New Zealand’s Reserve Bank Assistant Governor Karen Silk highlighted that interest rates are now in a neutral range of 2.5% to 3.5% after the recent 25 basis point cut, with further policy decisions expected to depend on incoming economic data.

Related articles on Tredu.com:

• How China’s PMI Data Impacts NZD
• RBNZ Monetary Policy Updates and Market Reaction
• US ISM Manufacturing PMI and Global Currency Trends