The Kiwi Dollar drifted lower overnight as the USD strengthened on better than expected manufacturing data. The NZD had initially begun to make back some of the ground lost last week as strong Chinese Data boosted the global economic outlook, but the rally was short lived with the Kiwi falling back to the 68 cent level.
Global Growth Showing Positive Signs
Concerns over the global economy eased as positive data out of both China and the U.S gave markets a positive tone overnight. China’s manufacturing sector saw a surprise return to growth in March following government efforts to boost the economy, a private survey showed on Monday. The Caixin Markit Manufacturing Purchasing Managers Index came in at 50.8 for March vs forecasts of 50.0. In the U.S there were more positives than negatives, with retail sales falling by 0.2% in February being countered by a revised January number which showed a 0.7% increase. Later in the day US ISM was better than expected, coming in at 55.3 vs forecasts of 54.3, giving the US Dollar a boost.
All Eyes on RBA
Closer to home, the big event today is this afternoon’s RBA monetary policy statement. The big question is whether the RBA will follow the RBNZ’s lead from last week and shift to a more dovish tone. Views are mixed, with many believing it will be too soon for Governor Lowe given he only recently changed his tone to neutral. Direction for NZD/AUD will be dictated by this afternoon’s statement.
Beyond this afternoon, the next big events for NZD are the GDT Dairy Auction and U.S Durable Goods both due overnight.
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