The NZD/USD moved higher overnight in the backdrop of a weaker USD. It sits at 0.8020 this morning. The NZD/USD was initially a little softer yesterday. Data showed NZ manufacturing activity declined 2.0%q/q s.a. in Q2. Partly attributable to earlier drought impacts, the data was sufficiently weak for us to revise down our expectations for Q2 GDP (due next week) to -0.2%q/q. Overall however we see the step down in Q2 activity as temporary, actually revising higher our expectations for Q3 GDP to 1.3%.
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BNZ