- Current Account Deficit in New Zealand widened in third quarter.
- US Dollar Index extends rebound toward 97.50 region.
- Coming up: Trade Balance and GDP data from New Zealand.
The NZD/USD pair extended its technical correction into a third straight day on Wednesday and touched a fresh weekly low of 0.6554 before recovering modestly in the last couple of hours. As of writing, the pair was trading at 0.6570, losing 0.06% on a daily basis.
NZD stays relatively calm ahead of GDP data
The only data from New Zealand during the Asian trading hours showed that the Current Account Deficit in the third quarter widened slightly but was largely ignored by the market participants. Commenting on the data, “in seasonally adjusted terms, the current account deficit widened $0.3bn from Q2, led by a widening goods deficit, as exports fell and imports lifted,” said ANZ analysts. “New Zealand’s net international liability position widened $6bn from Q2 to $172.8bn, and widened 1.4%pts as a share of GDP to 56.3%.”
On Thursday, Trade Balance and Gross Domestic Product (GDP) data, which is expected to show that the economy expanded by 2.4% on a yearly basis in the third quarter following the previous quarter’s 2.1% growth, from New Zealand will be looked upon for fresh impetus. A disappointing GDP reading could cause investors to start pricing Reserve Bank of New Zealand (RBNZ) rate cut expectations and weigh on the NZD.
On the other hand, the US Dollar Index continues to stretch higher despite a lack of fundamental drivers and makes it difficult for the pair to turn bullish in the day. At the moment, the US Dollar Index is up 0.27% on the day at 97.45. Later in the session, Chicago Fed President Charles Evans will be delivering a speech.
Technical levels to watch for
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