• The NZD/USD pair declined following the release of mixed US PMI data.
• US Treasury yields decline, but the US dollar increases.
• The trade balance of New Zealand increased to $-11.99 billion.

Due to a stronger US dollar (USD), NZD/USD is losing ground for the second straight session. A range of US statistics might explain this. Throughout Friday’s Asian trading hours, the NZD/USD pair continues to decline, closing in around 0.6020.

The S&P Global Services PMI showed a minor reduction in March, falling from 52.3 to 51.7, which was marginally less than the 52.0 predicted figure. On the other hand, the Manufacturing PMI rose to 52.5, above the 51.7 forecast and the 52.2 reading that was previously recorded. The Composite PMI did, however, reveal a minor decline, going from 52.5 to 52.2.

Despite declining US Treasury yields, the US Dollar Index (DXY) is still rising. The Federal Reserve (Fed) has reiterated its anticipation for three interest rate decreases in 2024, which has put pressure on the US dollar. Most agree that an easing cycle will begin in June, and the dates of any further cuts will depend on new information.

 

From $-12.62 billion in January to $-11.99 billion in February, New Zealand’s trade balance increased year over year. After a little decrease in January, there was an increase in both imports and exports. While imports increased from $5.9 billion to $6.11 billion, exports increased to $5.89 billion from $4.81 billion.

Furthermore, there are growing expectations that, in response to an unanticipated recession in Q4 of 2023, the Reserve Bank of New Zealand (RBNZ) may consider lowering its official cash rate this year rather than waiting until next year.