NZD/USD remains on the defensive below the 0.6000, RBNZ rate decision eyed
- NZD/USD loses momentum and holds below 0.6000 on Monday.
- The US Producer Price Index (PPI) rose 0.8% in July from 0.1% in June.
- Market players anticipate the Reserve Bank of New Zealand (RBNZ) to maintain the rate unchanged at 5.5%.
- Investors will monitor the RBNZ policy meeting, the US Retail Sales, FOMC minutes.
The NZD/USD pair remains under pressure and holds below 0.6000 during the early Asian session on Monday. The upbeat US Producer Price Index (PPI) on Friday lifts the Greenbacks and drags the New Zealand Dollar (NZD) lower. Market players await the Reserve Bank of New Zealand (RBNZ) interest rate decision on Wednesday for fresh impetus. The pair currently trades around 0.5987, gaining 0.06% for the day.
On Friday, the US Bureau of Labour Statistics revealed that the US Producer Price Index (PPI) for final demand YoY rose 0.8% in July from 0.1% in June. The figure was higher than the market expectation of 0.7%. Additionally, the University of Michigan’s (UoM) Consumer Confidence Index for July fell to 71.2 from 71.6, better than 71 expected. Finally, UoM 5-year Consumer Inflation Expectations declined to 2.9% for August versus 3.0% estimated and prior. Following the mixed New Zealand data, the US Dollar attracted some buyers and dragged the NZD/USD lower.
On the other side, the latest data from Business NZ showed that the Business NZ Performance of Services Index came in at 47.8 versus 50.1 prior. Last week, the New Zealand Inflation Expectations QoQ came in at 2.83% versus 2.79% prior. While the Business NZ PMI fell to 46.3 versus 49.4 expected. According to a Reuters poll, the majority of analysts anticipate that the Reserve Bank of New Zealand (RBNZ) will maintain rates at 5.50%, a 14-year high, for the second consecutive meeting on Wednesday.
The New Zealand Dollar could extend its downside with weaker data and dovish stance by the RBNZ. Market participants will closely watch the RBNZ Interest Rate Decision on Wednesday with the rate expected to remain unchanged at 5.5% and the New Zealand’s Producer Price Index due on Thursday. On the US docket, the release of the US Retail Sales and FOMC minutes will be the key events. Also, the comments of Fed officials for the Jackson Hole Symposium will be in focus. The data will be critical for determining a clear movement for the NZD/USD pair.