New Zealand Dollar Higher After Strong China Factory PMI

The New Zealand dollar strengthened against its major counterparts in the Asian session on Monday, as China’s factory activity expanded in August at the fastest pace since March.

Survey data from IHS Markit showed that the Caixin factory Purchasing Managers’ Index rose to 50.4 in August from 49.9 in July. A score above 50 indicates expansion.

Economists had forecast a score of 49.8.

Overall sentiment was hurt by US-China trade war worries, as a new round of tariffs on each other’s exports took effect over the weekend.

U.S. tariffs on about $112 billion worth of Chinese imports went into effect on Sunday, while China started to impose retaliatory tariffs on some of the $75 billion worth of U.S. goods it has targeted.

The kiwi gained to 0.6312 against the greenback, from a low of 0.6289 hit at 8:45 pm ET. If the kiwi rises further, 0.645 is likely seen as its next resistance level.

Bouncing off from a low of 66.72 seen at 6:00 pm ET, the kiwi appreciated to 67.03 against the yen. On the upside, 69.00 is likely seen as the next resistance level for the kiwi.

Survey data from IHS Markit showed that Japanese firms’ capital investment increased in the second quarter despite the Sino-U.S. trade war but companies reported a notable fall in profits compared to last year.

The manufacturing sector logged one of the strongest contraction seen over the past three years in August as output and orders continued to decline, while employment was the only positive indicator.

The kiwi inched up to 1.7414 against the euro, from a low of 1.7471 it recorded at 8:45 pm ET. The currency may possibly challenge resistance around the 1.71 level.

The kiwi rose to 1.0660 against the aussie, after falling to 1.0686 at 9:15 pm ET. The next possible resistance for the kiwi is seen around the 1.05 level.

Looking ahead, Swiss retail sales for July are due at 2:30 am ET.

PMI reports from major European economies will be featured in the European session.

U.S. markets are closed for the Labor day holiday.

The material has been provided by InstaForex Company – www.instaforex.com

Source:: New Zealand Dollar Higher After Strong China Factory PMI

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