New Zealand is expected to report a drop of 1% first-quarter economic output. NZD/USD has room to rise but the full reaction depends on the underlying market mood, FXStreet’s analyst Yohay Elam reports.
Key quotes
“Economists expect the economy of the South Pacific nation to fall by 1%, the first contraction since the third quarter of 2010 – nearly 2010. A drop of 1% would match the crash in the first quarter of 2009.”
“The market mood at the time of the publication is likely to impact the reaction. An upbeat figure will compound a rally based on optimism, while a depressing GDP figure could exacerbate a sell-off of the kiwi based on global gloom.”
“If statistics surpass estimates but investors are downbeat, the increase could be muted. The same logic applies to a faster contraction in New Zealand, yet coming after another rally in stocks.”
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