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NZD: NZD/USD Gets Hammered Following The Fed, NZ GDP Miss

NZD
USNew ZealandNorth AmericaBulletAPACForeign Exchange BulletsMarkets
  • NZD/USD was trending lower heading into the Fed, before a large gap down as the USD surged following a hawkish Fed. NZ GDP just out which has put the kiwi under further pressure we last trade 2.26% lower at 0.5622, the lowest since Oct 2022.
  • The BBDXY Index surged 0.90% to its highest level since November 2022 after the Federal Reserve delivered a 25bp rate cut but signaled just two cuts for 2025, down from September's forecast of 100bp of cuts.
  • New Zealand's Q3 GDP contracted 1.0% QoQ and 1.5% YoY, missing estimates due to sharp declines in construction (-2.8%), manufacturing (-2.6%), and retail trade/accommodation (-1.1%), reflecting weak investment and consumer spending. Primary industries (+1.0%) and real estate (+1.0%) offered some support, but overall, the contraction highlights widespread economic challenges.
  • The pair has smashed through Immediate support, with eyes now on 0.5600, a break here could open a move to test the 2022 lows at 0.5500. We trade well below all moving averages, while the RSI is now nearing it's most oversold for the year, at 25. Initial resistance is at 0.5793 (Dec 18th highs), the 20-day EMA is currently 0.5800.
  • The NZ-US 2yr swap has continued it's move lower, following a +11bps rise in the US 2yr post the Fed, we last trade -78bps, the lowest since Nov 2018.
  • Up next we have ANZ Business Confidence & Activity Outlook, however this is unlikely to have much impact on the market.
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  • NZD/USD was trending lower heading into the Fed, before a large gap down as the USD surged following a hawkish Fed. NZ GDP just out which has put the kiwi under further pressure we last trade 2.26% lower at 0.5622, the lowest since Oct 2022.
  • The BBDXY Index surged 0.90% to its highest level since November 2022 after the Federal Reserve delivered a 25bp rate cut but signaled just two cuts for 2025, down from September's forecast of 100bp of cuts.
  • New Zealand's Q3 GDP contracted 1.0% QoQ and 1.5% YoY, missing estimates due to sharp declines in construction (-2.8%), manufacturing (-2.6%), and retail trade/accommodation (-1.1%), reflecting weak investment and consumer spending. Primary industries (+1.0%) and real estate (+1.0%) offered some support, but overall, the contraction highlights widespread economic challenges.
  • The pair has smashed through Immediate support, with eyes now on 0.5600, a break here could open a move to test the 2022 lows at 0.5500. We trade well below all moving averages, while the RSI is now nearing it's most oversold for the year, at 25. Initial resistance is at 0.5793 (Dec 18th highs), the 20-day EMA is currently 0.5800.
  • The NZ-US 2yr swap has continued it's move lower, following a +11bps rise in the US 2yr post the Fed, we last trade -78bps, the lowest since Nov 2018.
  • Up next we have ANZ Business Confidence & Activity Outlook, however this is unlikely to have much impact on the market.