Economic data from New Zealand was not particularly positive today, but it was likely not the reason for the drop of the New Zealand dollar. News from China, the biggest trading partner of the South Pacific nation, was the driving force behind the decline.
Both input and output New Zealand Producer Price Indexes fell last quarter, but the reading could not be considered really bad as the decline was far smaller than in the previous three months. The real culprit that has driven the New Zealand currency down was fear of economic slowdown in China. The unstoppable collapse of the Chinese stock market drove investors away from riskier assets, especially of those countries that have strong economic ties with the Asian nation.
NZD/USD dropped from 0.6601 to 0.6564 and NZD/JPY declined from 82.11 to 81.63 as of 14:17 GMT today.
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