By Areena Fx- The New Zealand Dollar drifts lower on Monday, with the US Dollar picking up from lows.
- Upbeat services data from China failed to support the NZD.
- US Services figures and New Zealand’s employment data are in the spotlight today
The New Zealand Dollar has shrugged off the positive services activity data from China released earlier on Tuesday and extends its reversal from Monday’s highs at 0.5930 to levels below 0.5900. The US Dollar is picking up but remains trapped within recent ranges with US Serviceson focus, while, in New Zealand, the highlight will be the Q2 employment raport
Earlier on Tuesday, the Caixinn Purchasing Managers Index for July revealed that ¡ services activity accelerated at its fastest rate in more than one year in July. The index increased to 52.6 from the previous month’s 50.6 reading, beating market expectations of a moderate slowdown to 50.4.
The report pointed to the positive impact from new businesses and the increase in external demand, which had been contracting during the previous two months, as the main reasons for July’s upbeat figures.
Positive data from China fails to support the Kiwi
The figures, however, failed to provide any significant support to the China-proxy New Zealand Dollar. The Kiwi remains on its back for the second consecutive day, as the US Dollar appreciates across the board, with the dust from Friday’s US NFP report settling.
The US Dollar Index, which measures the Greenback against a basket of the most traded currencies, appreciates for the second day in a row, with US Treasury yields picking up from post-NFP lows.
The pair is testing an intra-day support area at 0.5890, with investors awaiting US Services activity data, which is expected to show some improvement, while in New Zealand, the Employment report, due later on the day, might provide some insight into the RBNZ’s policy plans.