NZ Dollar Rises Amid Hawkish RBNZ Policy Outlook
(RTTNews) - The New Zealand dollar strengthened against other major currencies in the European session on Friday, as traders continue to price in a Reserve Bank of New Zealand (RBNZ) rate hike for next month.
In order to maintain market expectations for another rate increase, the RBNZ has consistently emphasized the need to reduce some of its policy support.
However, new concerns about how far the RBNZ can continue to tighten its monetary policy have been prompted by weaker economic data that was reported this week.
In economic news, data from BusinessNZ showed that the manufacturing sector in New Zealand continued to expand in July, albeit at a slower pace, with a Performance of Manufacturing Index score of 54.3.
That's down from the upwardly revised 60.1 in June (originally 59.7).
In the European trading today, the NZ dollar rose to 2-day highs of 0.5884 against the U.S. dollar, 93.63 against the yen and 1.2027 against the Australian dollar, from early lows of 0.5853, 93.31 and 1.2068, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.59 against the greenback, 95.00 against the yen and 1.18 against the aussie.
Against the euro, the kiwi edged up to 1.9638 from an early low of 1.9705. The kiwi may test resistance around the 1.95 region.
Looking ahead, Canada CPI data for July, manufacturing and wholesale sales for June, U.S. retail sales data for July, U.S. University of Michigan consumer sentiment for August, U.S. business inventories for June and U.S. Baker Hughes oil rig count data for August are slated for release in the New York session.
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