The NZD/USD pair remained under pressure, hovering near 0.5650 after the Business NZ PSI (Performance of Services Index) reported a decline, signaling slowing economic activity in New Zealand’s service sector. The weaker data has heightened concerns about the country’s economic outlook, limiting demand for the New Zealand dollar.
The Business NZ PSI dropped to its lowest level in months, reflecting softer business sentiment and slower expansion in key service industries. This comes amid broader challenges facing the New Zealand economy, including rising inflation and global economic uncertainties, which continue to weigh on the Kiwi dollar.
Meanwhile, the US dollar remained firm, benefiting from stronger US economic indicators and expectations of further Federal Reserve interest rate hikes. This divergence between the US and New Zealand economic performance has further widened, keeping the NZD/USD pair under selling pressure.
Market participants are now closely watching upcoming New Zealand economic data and central bank signals for further clues. For now, the NZD/USD’s performance is likely to remain subdued as traders factor in both domestic weakness and external headwinds.
