New Zealand Dollar Drops After Disappointing 2Q GDP Data
Markets

New Zealand Dollar Drops After Disappointing 2Q GDP Data

DailyFX.com -

Talking Points

  • New Zealand Dollar drops following 2Q GDP figures
  • GDP grew 0.9% q/q vs. 1.1% expected, 0.7% q/q in 1Q
  • Data may have encouraged RBNZ rate cut speculation

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The New Zealand Dollar declined after second quarter GDP data disappointed relative analysts' expectations, possibly fueling RBNZ rate cut speculation. The year-on-year output growth rate registered at 3.6 percent, in line with expectations. However, the quarter-on-quarter gain crossed the wires at 0.9 percent, slightly lower than the 1.1 percent projected by economists.

Overnight index swaps (OIS) suggested that traders were already pricing in at least one cut in the central bank's main lending rate over the coming 12 months ahead of the GDP release. With that in mind, the worse-than-expected data may have trigged speculation that a reduction may come sooner relative to prior bets. As it stands however, the probability of a cut at the next RBNZ meeting is implied at just 6 percent.

New Zealand Dollar Drops After Disappointing 2Q GDP Data

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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