Home›Forex›Major Pairs›New Zealand dollar gains as manufacturing survey boost…

New Zealand dollar gains as manufacturing survey boosts growth optimism

The NZD rally follows a BusinessNZ manufacturing index jump to 59.7, while markets turn to Canada’s jobs data for direction on CAD.

Reported · Written up by our desk · Major Pairs

The New Zealand dollar rose broadly as a stronger-than-expected manufacturing survey added to optimism that the economy is gaining momentum after the Reserve Bank of New Zealand raised the Official Cash Rate to 2.50% the prior day, according to Action Forex.

BusinessNZs Performance of Manufacturing Index surged to 59.7 in June, its highest reading since mid-2021, with improvements reported across new orders, production, employment, and deliveries. Action Forex notes that this result offers what it calls strong ex post validation for the RBNZs rate hike, even as policymakers did not signal another imminent move.

In contrast, the Canadian dollar weakened despite a sharp rebound in oil prices, reflecting what Action Forex describes as structural concerns about Canadas economic outlook that crude support has not offset. Action Forex also points to fresh uncertainty for investment and trade after the Trump administration decided not to automatically extend the USMCA, and it links that backdrop to the Bank of Canada Governor Tiff Macklems view that Canada is undergoing structural adjustment as US trade relations evolve.

Dollar sentiment was also mixed as traders awaited developments on the fragile US-Iran ceasefire, with Brent failing to hold an early push above the $80 level. Attention is now focused on Fridays June employment report, with Action Forex saying a softer outcome would be expected to reinforce existing expectations for the next phase of rate setting.

Latest closeWTI crude $81.23 ▼1.7%|Brent $85.92 ▼2.8%

More like this

Sources