- NZD/USD slides towards the 200-DMA and awaits the GDP data later today.
- Global dairy prices weighed on the kiwi as market euphoria dies down.
NZD/USD is currently trading at 0.6573 having travelled down from a high of 0.6590 to a low of 0.6554, on track for a test of the 200-day moving average as traders get set for the Gross Domestic Produce, quarter-three.
NZD/USD has been one of the top performers in the trading weeks of November and the start of December as trade deal traction made for euphoria in markets that lifted the commodity complex, supporting the kiwi. However, the bird lost its wings at 0.6635 and has since fallen around 80 pips to the downside – yesterday’s unexpectedly sharp fall in global dairy prices didn’t help.
NZ GDP and RBNZ in focus
Global trade has been the main focus although as the New Year approaches, the central banks will be a significant factor in markets which brings us to today’s GDP data – a crucial number for the Reserve Bank of New Zealand to factor for its next meeting.
“Perhaps local GDP data will provide some domestic fireworks today, though if it does it’ll be a surprise to us, with our expectation of 0.5% QoQ (2.3% YoY) about par,” analysts at ANZ said.
Analysts at Westpac, who expect a 0.5% QoQ and YoY 2.3% argued that “conditions were mixed over the quarter, with strength in retailing and business services, while forestry, travel and personal services were soft. A stronger than expected manufacturing survey has made it likely that growth will exceed the Reserve Bank’s estimate of 0.3%.”
The market’s pricing for RBNZ implies only a 5% chance of easing in February, with a terminal rate of 0.91% (RBNZ OCR currently at 1.0%), according to analysts at Westpac.
NZD/USD levels
Bears are lined up at the top of the channel resistance as the price heads towards the 200-DMA in the 0.6520s which meets with the 21-DMA ahead of 0.6480 June double bottom lows.
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