Key points
- Weaker-than-expected Chinese manufacturing data reinforce the case for economic stimulus
- CAD traders look to Canadian manufacturing data for clues over economic health
The risk-sensitive New Zealand Dollar weakened against its Canadian counterpart on Tuesday, after a private survey showed China’s factory activity had shrunk for the first time since April in July, as new orders decreased and foreign sales dropped the most since September 2022.
The Caixin China General Manufacturing PMI came in at 49.2 in July, down from 50.5 in June, while registering its lowest level since January. Market consensus had pointed to a slower drop – to 50.3.
The data underscored the need for an expansionary fiscal policy that targets demand.
China is a key trading partner to New Zealand.
Meanwhile, CAD traders will be paying attention to Canadian factory activity data for July due out at 13:30 GMT.
In June, the S&P Global Manufacturing PMI for Canada came in at a reading of 48.8, which indicated the third month of contraction since the start of 2023, as high interest rates continued hampering economic activity.
As of 9:21 GMT on Tuesday NZD/CAD was edging down 0.28% to trade at 0.8164. Last Friday, the minor Forex pair went down as low as 0.8103. The latter has been the pair’s weakest level since June 30th (0.8030).
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