THE TAKEAWAY: New Zealand’s Business PMI for January came in at 55.2, higher than December’s rating of 50.1 > Indicates economic growth, lessening chance of rate cuts > NZD Outlook Bullish
New Zealand’s BNZ-Business Performance of Manufacturing Index (PMI) for January came in at a level of 55.2, surpassing December’s rating of 50.1. The Kiwi appreciated sharply following the report, with the NZD/USD jumping from 0.84148 to a multi-day high of approximately 0.84586 as of this report.
The higher PMI rating indicates a pick-up in New Zealand business activity, diminishing the chances of a rate cut and maintaining the attractive carrying value of the New Zealand currency. More positive data should continue to bolster the Kiwi’s value, especially given the current risk-on sentiment of the market, while future negative economic reports may have the opposite effect. Forex traders should look at a potential resistance level of around 0.8475, which the NZD/USD has failed to break above over the last several weeks.
NZD/USD (1 Minute – 2 Hour Chart)
Chart created usingMarket Scope– Prepared byJason Shemtob
NZD/USD (Daily - 6 Month Chart)
Chart created usingMarket Scope– Prepared byJason Shemtob
