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Q3 GDP Miss Pushes NZD/USD Back Sub 0.6200

NZD

NZD/USD spiked above 0.6200 late in NY trade, as Fed Chair Powell didn't push back market expectations of significant rate cuts next year. Highs were at 0.6214. We are weaker in the first part of Thursday trade, back near 0.6175/80 post the NZ Q3 GDP miss.

  • In terms of technicals, early Dec highs at 0.6223 are nearby, a break above this level would target a move to late July highs of 0.6274. Yesterday's lows of 0.6084 come in just above the 200-day EMA 0.6076. The 20-day EMA is higher at 0.6103.
  • The BBDXY was off around 0.75% for Wednesday sessions. Yields slumped -13 to -30bps across the curve, with the front end leading, as the Fed median dot plot forecast three rate cuts in 2024, coupled with little pushback from Chair Powell, drove market sentiment.
  • Equity sentiment was buoyant in the US, up 1.37% for the SPX.
  • The Q3 GDP contraction of 0.3% q/q, versus +0.2% forecast, may temper NZD bullishness. The follows yesterday's Nov partial price data which showed inflation was slowing quicker than the RBNZ forecast.
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