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- NZD/USD rose strongly to 0.6160 as the US dollar weakened after US PCE inflation grew as expected in April.
- Higher inflation in the US would weaken the Fed’s bets on a September interest rate cut.
- Investors are shifting their focus to US ISM and employment data.
the NZD/USD The pair rises to 0.6160 in the New York session on Friday. The New Zealand asset is seeing heavy buying interest as the US dollar weakens following US personal consumption spending Price index The April personal consumption expenditures (PCE) report showed that price pressures grew in line with estimates.
The monthly and annual headline inflation rates rose by 0.3% and 2.7%, respectively. Core personal consumption expenditures inflation, the Fed’s preferred measure of inflation because it strips out volatile food and energy prices, rose 0.2%, slower than the estimate and the previous release of 0.3% on a monthly basis. However, annual core PCE inflation rose expectedly by 2.8%.
The stubborn rise in PCE inflation makes it unlikely for… Nourish it To start cutting interest rates from the September meeting. The scenario is generally favorable for the US dollar, however, it is weakened by downwardly revised US GDP data in the first quarter. The revised estimate for first-quarter GDP shows the economy expanded at a slower pace of 1.3% than the initial estimate of 1.6%.
US dollar index (DXY), which measures the dollar’s value against six major currencies, fell more than 0.3% around 104.40.
Next week, investors will focus on the manufacturing and services PMI, which will be published by the Institute for Supply Management (ISM) and the non-farm payrolls (NFP) report for May.
The New Zealand dollar remains steady despite China’s National Bureau of Statistics reporting that the May manufacturing and non-manufacturing PMI came in below estimates. In this case, the New Zealand dollar faces pressure, as a proxy for China’s economic outlook.
