NZD to USD Still in Range After the Positive NZ Q1 GDP Report
Following a brief spike above its recent range early last week, the USD to NZD exchange rate has retraced back within the established range. Initially driven higher by sluggish US CPI inflation data, the NZD/USD pair subsequently dropped to the lower end of the range before rebounding, supported by moving averages, and returning towards the upper levels.
NZD/USD Chart Daily – Continues Bouncing Between MAs
New Zealand Global Dairy Trade (GDT)
Earlier this week, New Zealand’s Global Dairy Trade (GDT) auction indicated a decline, reflecting softer demand for dairy products, a significant export for New Zealand. Last night, the release of New Zealand’s Q1 GDP data revealed a marginal growth of 0.1%, ending two consecutive quarters of contraction and officially marking a technical recession.
RBNZ Expectations
The country’s weak economic performance raises expectations that the Reserve Bank of New Zealand (RBNZ) may consider early rate cuts. The RBNZ has maintained its Official Cash Rate (OCR) at 5.5% for over a year, but the recent economic data may prompt a reassessment of monetary policy to support economic recovery.
New Zealand GDP Report for Q1
Quarter-on-Quarter GDP Growth:
- Actual: +0.2%
- Expected: +0.1%
- Previous: -0.1%
Year-on-Year GDP Growth:
- Actual: +0.2%
- Expected: +0.3%
- Previous: -0.3%
The New Zealand GDP report for the first quarter revealed a quarter-on-quarter growth of 0.2%, surpassing the expected increase of 0.1%, which gave the NZD a little lift, sending it 25 pips higher. This marks an improvement from the last two quarters where we saw a contraction of 0.1%. On a year-on-year basis, the GDP grew by 0.2%, slightly below the anticipated growth of 0.3%, but still a notable recovery from the prior year’s decline of -0.3%.
NZD/USD Live Chart
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