Fundamentals Prevent NZD from Rallying

The New Zealand dollar attempted to rally today but failed and slid below the opening level. Economic data from New Zealand was not particularly supportive for the currency, and concerns about tomorrow’s manufacturing report from China further eroded bullishness of the kiwi.

The New Zealand currency rallied after the National Party of Prime Minister John Key secured majority in the parliament, giving it power to introduce reforms that are necessary for economic revival. Yet the currency was unable to maintain its bullish bias, partly due to concerns that China’s data may show that the growth of the nation’s manufacturing sector stalled. Data from New Zealand itself was not helpful either as the Westpac/McDermott Miller Consumer Confidence slipped to 116.7 in the September quarter from 121.2 in the previous three months, though the report said that consumers “remain firmly optimistic”.

NZD/USD slid from 0.8142 to 0.8116 as of 8:51 GMT today after rallying to 0.8170 earlier. NZD/JPY edged down from 88.74 to 88.46 following the rally to 88.96.

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