Home ForexForecasts New Zealand dollar falls after high US producer price index

New Zealand dollar falls after high US producer price index

by SuperiorInvest
  • US PPI rises 0.6%
  • New Zealand Manufacturing PMI expected to remain in negative territory

The New Zealand dollar lost ground on Thursday. In the North American session it is trading at 0.6136, with a drop of 0.33%. On Friday, New Zealand releases manufacturing PMI.

US producer price index higher than expected

It was a busy day in the United States and this writer expected retail sales to be the highlight of the day. In the end, it was the Producer Price Index that stole the show and gave a boost to the US dollar after a better than expected performance.

The February PPI surprised with a 0.6% month-on-month gain, well above the 0.3% in January and the market estimate of 0.3%. This was the highest rate since August 2023 and the main drivers of the rebound were increases in the price of goods and energy. On an annualized basis, the PPI rose 1.6%, up from a revised 0.9% in January.

The Fed is unlikely to be enthused by the headline reading as the core PPI fell to 0.3% MoM, down from 0.5% in January but above the market estimate of 0.2 %. On an annualized basis, the core CPI remained stable at 2%, just above the market estimate of 1.9%.

Retail sales rebounded in February with a 0.6% month-on-month gain, following a revised 1.1% decline in January, but below the market estimate of 0.8%. Retail sales rose 1.5% year-on-year, after a reading of zero in January.

New Zealand will conclude the week with the manufacturing PMI. The manufacturing sector has struggled and been stuck in negative territory for eleven consecutive months. Still, there was some improvement in January, as the PMI rose from 43.1 to 47.3, its highest level since June 2023. The rebound is expected to continue in February, with a forecast of 48.1.

NZD/USD Technical

  • NZD/USD is testing support at 0.6154. Below, there is support at 0.6092
  • There is resistance at 0.6240 and 0.6302

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