During Friday’s Asian session, the NZD/USD returns to its two-year low of around 0.5955. Yesterday, the kiwi pair broke 0.6000 as the US dollar rose. The quote didn’t consider New Zealand’s (NZ) more stable economic data and Q2 GDP (GDP).
The Business NZ PMI rose from 52.5 and 52.7 to 54.9 in August. Statistics New Zealand said on Thursday that its GDP for the second quarter rose 1.7% from the first quarter to the second quarter. It was higher than the market expected, 1.0%, and a drop of 0.2% in the first quarter. YoY growth was 0.4%, lower than the 0.2% expected and the 1.2% seen before.
In August, US retail sales went up 0.3%, which was better than the 0.0% predicted and the -0.4% in July. In August, the NY Fed Empire State Manufacturing Index was -31.3. In September, it went from -31.3 to -1.5. The Philadelphia Fed Manufacturing Index went down to -9.9, instead of the 2.8 and 6.2 predicted by economists. In August, US industrial production fell 0.2%, less than what the market had expected (0.1%) and what it had been before (0.5%).
The US, Europe’s worsening energy crisis, and China’s uncertain future hurt the NZD/USD. Before next week’s FOMC meeting, Fed bets might be just as hawkish.
Wall Street ended in the red because the yields on US Treasury bonds went up. According to the CME’s FedWatch Tool, the odds of the Fed raising interest rates by 0.75 and 1% at the FOMC meeting next week jumped to 80% and 20%, respectively.
Conclusion
The Michigan Consumer Sentiment Index (CSI) will then show the way. Concern about the Fed meeting may keep the bears in control.