Ella 
NZD/USD hovered around 0.6100 during early European trading on Friday as investors reacted to weak PMI data from New Zealand. The New Zealand Business Manufacturing Purchasing Managers’ Index fell to 41.1 in June from 47.2 in May. This was the 15th consecutive month of contraction and the third lowest value in a non-lockdown month. In addition, traders are awaiting the release of the Michigan Consumer Confidence Index and the US Producer Price Index (PPI) on Friday for further insights into the US economy.
NZD/USD found support as the US Consumer Price Index (CPI) data for June came in below expectations, which reinforced market expectations that the Federal Reserve (FED) may cut interest rates in September. The core CPI, which excludes volatile food and energy prices, rose 3.3% year-on-year in June, compared with a 3.4% increase in May, as expected. Meanwhile, the core CPI rose 0.1% month-on-month, compared with expectations and the previous value of a 0.2% increase.
Additionally, Chicago Federal Reserve Bank President Austan Goolsbee said on Thursday that the U.S. economy appears on track to achieve 2% inflation. This suggests Goolsbee is increasingly confident that the time for a rate cut could be coming soon. He also said, according to Reuters: “My view is that the path to 2% is this way.”
Earlier this week, the Reserve Bank of New Zealand (RBNZ) kept its cash rate at 5.5% on Wednesday as expected. However, the bank said a rate cut could be in the cards in August if inflation falls as expected. The RBNZ’s dovish monetary policy statement could weigh on the New Zealand dollar (NZD).
