New Zealand GDP in the barrel with the Kiwi at July lows
New Zealand reports second-quarter growth later on Wednesday, or early on Thursday depending on where you are relative to the international date line, and the forecast is 0.1% for the quarter, down from 0.8% in the first three months of the year.
New Zealand's economy shows signs of stagnation despite a recent GDP forecast of 0.1% growth, down from the impressive 0.8% growth registered in the first quarter of the year. Meanwhile, the annual forecast has slipped to 2.3% from the 1.5% projected earlier. The Reserve Bank of New Zealand made a significant move on September 2, raising the official cash rate (OCR) to 2.75% amid inflation at 4.1%, heralding the beginning of the economy's recovery.
This marked the first concrete evidence of the Reserve Bank's optimistic outlook. Against this backdrop, the New Zealand Dollar (NZD) against the US Dollar (USD) has plummeted to its lowest level since early July, trading above 0.5700. The pair has been on a downward trajectory since late August, consistently failing to break above the 0.5800 mark, and is currently trading below both its 50-day and 200-day Exponential Moving Averages (EMA).
The daily Stochastic Relative Strength Index, a momentum indicator, has also hit the bottom of its range, last seen during a sharp sell-off in June that pushed the NZD/USD to just above 0.5600.
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