New Zealand’s Manufacturing Activity slumped sharply in the second quarter, falling -0.6% versus a revised 3.0% in the three months to April. The down tick owed to sharp declines in meat and dairy sales, which together declined -8.9%. The New Zealand dollar took the release in stride, with price action dominated by the apparent reversal in the US dollar. Indeed, the greenback sold off against all the majors last Friday with NZDUSD gaining 3%. The dollar’s sudden weakness may be related to a shift in US interest rate expectations. Fed Funds futures currently suggest the likelihood of a 25 basis point rate cut on September 16th at 12%, whereas the markets saw no chance of this happening just a week ago. Still, most traders (88%) continue to bet that rates will remain at 2%.
For a complete listing of this week’s data releases, please see the DailyFX Economic Calendar.