The NZD/USD exchange rate is showing signs of stability following the release of mixed economic figures from China. The Business NZ Performance of Manufacturing Index (PMI) reported a decline to 45.8 in October from a revised 47.0 in September, marking the lowest point since July. Despite this, the New Zealand Dollar maintained its position around 0.5850 during Friday’s Asian trading session, breaking a three-day losing trend.
The downward pressure on the NZD primarily stems from the PMI data, which reflects challenges in the manufacturing sector. However, the overall performance of the NZD/USD pair held steady, as mixed economic indicators from China provided some support. Notably, China’s retail sales rose by 4.8% year-on-year in October, exceeding expectations of 3.8% and surpassing the 3.2% growth seen in September. Additionally, industrial production for the same month experienced a year-over-year increase of 5.3%, just shy of the anticipated 5.6% but an improvement from the previous month’s 5.4%.
In remarks released during a recent press conference, the National Bureau of Statistics (NBS) of China highlighted an improvement in consumer expectations for October. They also indicated plans to implement additional policy measures aimed at stimulating domestic demand, which has already begun to yield positive effects on the economy.
Meanwhile, the US Dollar remains near its recent 2024 highs despite evidence of a slowdown in particular market segments. The US Dollar Index, assessing the dollar’s strength against six major currencies, is trading around 107.00, close to its highest level since November 2023.
Market sentiment is turning toward the upcoming release of US retail sales data for October and further comments from officials at the Federal Reserve. Fed Chair Jerome Powell recently noted the resilience of the US economy, suggesting the central bank may have room to gradually decrease interest rates in the future.
