Created
: 2025.07.31
2025.07.31 20:50
The New Zealand Dollar recovery attempt against its US counterpart was capped at the 0.5940 area earlier today, and the pair has given away gains during Thursday's European session, retreating to levels right above multi-month lows, at 0.5885.
The Kiwi remains on its back foot following a 2.5% sell-off during the last five days as the US Dollar appreciates across the board amid a combination of strong data, dwindling hopes of Fed cuts, and a slew of deals that have eased concerns about trade uncertainty.
The Federal Reserve stood pat on Wednesday and gave few clues about the timing of the next rate cut, prompting investors to dial back expectations of monetary easing for this year. Fed Chairman Powell reiterated his call for patience until the real impact of tariffs is evidenced, which, he reckoned, might take months. The US Dollar appreciated across the board following Powell's Press release.
Beyond that, manufacturing activity data from China, New Zealand's leading trading partner, contracted beyond expectations as foreign demand lost steam while domestic demand remains weak. The NBS Manufacturing PMI fell to 49.3 in July, from 49.7 in June, against expectations of a steady reading, which increased negative pressure on China proxies, such as the New Zealand Dollar.
In the US, the focus today is on July's PCE Inflation release. Price pressures are seen accelerating to 2.5% year-on-year r, from the previous 2.3% although the Core PCE is likely to have remained unchanged at 2.7%. These figures might keep the IS Dollar underpinned, at least until Friday's Nonfarm Payrolls report.
The Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The YoY reading compares prices in the reference month to a year earlier. Price changes may cause consumers to switch from buying one good to another and the PCE Deflator can account for such substitutions. This makes it the preferred measure of inflation for the Federal Reserve. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Read more.Next release: Thu Jul 31, 2025 12:30
Frequency: Monthly
Consensus: 2.5%
Previous: 2.3%
Source: US Bureau of Economic Analysis
The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal Reserve's (Fed) preferred gauge of inflation. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures." Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Read more.Next release: Thu Jul 31, 2025 12:30
Frequency: Monthly
Consensus: 2.7%
Previous: 2.7%
Source: US Bureau of Economic Analysis
After publishing the GDP report, the US Bureau of Economic Analysis releases the Personal Consumption Expenditures (PCE) Price Index data alongside the monthly changes in Personal Spending and Personal Income. FOMC policymakers use the annual Core PCE Price Index, which excludes volatile food and energy prices, as their primary gauge of inflation. A stronger-than-expected reading could help the USD outperform its rivals as it would hint at a possible hawkish shift in the Fed's forward guidance and vice versa.
Created
: 2025.07.31
Last updated
: 2025.07.31
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy