New Zealand’s economy expected to expand 0.1% QoQ in Q4 as the recovery momentum falters due to the impact of the Auckland lockdown. Meanwhile, NZD/USD remains confined within Monday’s trading between 0.7217 and 0.7158 so far this week. According to FXStreet’s Dhwani Mehta, kiwi’s fate hinges on the Federal Reserve decision and risk tone.
Key quotes
“The South Pacific nation’s GDP rate is expected to fall sharply to 0.1% QoQ in the three months to December vs. a 14% rebound seen in the third quarter of 2020. On an annualized basis, the economy is likely to have expanded 0.5% in Q4 vs. a 0.4% growth recorded in the previous quarter.”
“Only a big beat on the NZ GDP figures could put a floor under NZD/USD, which could power the kiwi bulls towards March highs just above the 0.7300 level.”
“A dovish Fed along with a downbeat GDP reading could help the spot to extend its decline towards 0.7100.”
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