Forex News: NZ Dollar Falls On Soft China Data

NZ Dollar Falls On Soft China Data

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Friday, after China's industrial production and retail sales logged slower growth in July.

Data from the National Bureau of Statistics showed that China industrial production grew 5.7 percent from a year ago, following June's 6.8 percent increase. Output was forecast to climb 5.9 percent.

Likewise, retail sales growth eased more-than-expected to 3.7 percent from 4.8 percent in June. Sales were forecast to climb 4.6 percent. Economists were expecting a 4.6 percent increase.

During January to July period, fixed asset investment increased 1.6 percent from the last year, weaker than the 2.8 percent rise in the first six months. This was also slower than the forecast of 2.7 percent.

In economic news, data from Business NZ showed that the manufacturing sector in New Zealand moved up into expansion territory in July, with a seasonally adjusted Performance of Manufacturing Index score of 52.8.That's up from 49.2 in June.

Meanwhile, the Asian stock markets traded mixed as the hotter-than expected US producer price inflation data and a resilient US labor market softened expectations of a higher half point interest rate cut by the US Fed in September. Traders also remain cautious ahead of the crucial U.S.-Russia talks to end the ongoing three-plus-year Russia-Ukraine war.

In the Asian trading today, the NZ dollar fell to more than a 4-month low of 1.9721 against the euro, from yesterday's closing value of 1.9678. The kiwi may test support near the 1.98 region.

Against the U.S. and the Australian dollars, the kiwi dropped to a 9-day low of 0.5908 and nearly a 1-month low of 1.0987 from Thursday's closing quotes of 0.5921 and 1.0974, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.57 against the greenback and 1.10 against the aussie.

The kiwi edged down to 87.05 against the yen, from yesterday's closing value of 87.44. On the downside, 85.00 is seen as the next support level for the kiwi.

Looking ahead, Canada manufacturing, new motor vehicle and wholesale sales data for June, U.S. retail sales data, export and import prices data, industrial and manufacturing sales data for July, U.S. University of Michigan's consumer sentiment for August and U.S. Baker Hughes oil rig count data are slated for release.

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