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NZD/USD slips below 0.5900 on weaker China data
The Kiwi is weighed by China Retail Sales slowing to 0.6% and Industrial Production missing expectations, while markets shift toward a September Fed hold.
The New Zealand dollar edged lower against the US dollar on Tuesday, with NZD/USD falling to around 0.5895 during Asian trading hours, according to FXStreet.
FXStreet attributed the move to weaker-than-expected Chinese data that typically weighs on the China-proxy Kiwi. China’s Retail Sales rose 0.6% year over year, below both the 1.5% estimate and the 1.0% reading in June, while Industrial Production increased 4.5% year over year in July versus 5.3% and missed expectations.
The article noted that the slower growth in July dragged the Kiwi lower because China is a major trading partner of New Zealand. It also cited FXStreet commentary that reduced odds of additional Fed tightening could limit upside for the greenback.
Looking ahead, FXStreet said markets are pricing in a September quarter-point hike that has flipped to about a 65% chance of a hold, after softer inflation and weaker retail sales. The piece added that the Reserve Bank of New Zealand is set to hold its next policy meeting in about two weeks, and that Commerzbank’s Volkmar Baur expects it is unlikely to raise rates again after July’s move, even as he anticipates a hawkish tone tied to ongoing Middle East risks.