NZD/USD EXTENDS DOWNSIDE BELOW 0.6100, ALL EYES ON FED’S POWELL SPEECH
- NZD/USD remains under some selling pressure around 0.6070 in Tuesday’s early Asian session.
- US manufacturing activity continued to decline in June.
- NZIER New Zealand Business Confidence extends decline in Q2.
The NZD/USD pair extends the decline near 0.6070 during the early Asian session on Tuesday. The renewed US Dollar (USD) demand and a further decline in New Zealand’s business activity outlook surveys drag the pair lower. Market players will keep an eye on Federal Reserve (Fed) Chairman Jerome Powell's speech on Tuesday for fresh impetus, followed by the Fed’s latest monetary policy minutes on Wednesday.
Growth in activity in the United States manufacturing sector continued to contract in June, according to the Institute for Supply Management (ISM) on Monday. The US ISM Manufacturing Purchasing Managers Index (PMI) declined to 48.5 in June from 48.7 in May, below the market expectation of 49.1.
The weaker-than-expected US Manufacturing PMI data, along with the US Personal Consumption Expenditures (PCE) Price Index data last week, have spurred speculation that the Fed would start an easing cycle this year, which might weigh on the Greenback. Traders are now pricing in nearly 59.5% chance of 25 basis points (bps) of Fed rate cut in September, up from 58.2% last Friday, according to CME FedWatch Tool.
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