- Catherine Beard, BusinessNZ's executive director for manufacturing
The NZD/USD pair refused moving above 0.8605 even despite a rate hike from the RNZ, while the outlook for the pair is still bullish. The next strong resistance is located at 0.8675, and strong fundamental data from New Zealand are supporting another adjustment to the New Zealand central bank's monetary policy and hawkish comments from Graeme Wheeler.
Another sector that is showing sustained growth is New Zealand's manufacturing sector. Activity expanded at steady pace in February, as demand is supported by a boom in the construction industry, record dairy payouts as well as rising net-immigration. A gauge of manufacturing activity expanded 56.2 last month, posting the 18th straight monthly gain. Even though it is a slight deterioration from January's 56.3, it is still highly above the 50 zone that separates growth from contraction. Production within the sector expanded at the fastest pace since July 2013, while the number of new orders lost some of the momentum over the period.
With both consumer and business confidence running rampant, additional boost from the Canterbury rebuild, strong housing market and other factors, inflationary pressure is projected to rise further, adding more pressure on the central bank to make it monetary policy more appropriate, hence, another rate hike can be expected already in April.
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