The New Zealand (NZ) economy aims for a phenomenal turnaround in the third quarter of 2021, rebounding from the first recession witnessed in a decade last quarter. Kiwi is set to get a fresh boost although it depends on the FOMC, risk mood, FXStreet’s Dhwani Mehta reports.
Key quotes
“The South Pacific nation’s GDP is seen expanding 13.5% QoQ in the three months to September vs. a 12.2% slump recorded in the second quarter of 2020. On an annualized basis, the economy is expected to contract 1.3% in Q3 vs. -12.4% prior.”
“The FOMC is likely to maintain its monetary policy settings but publish upbeat economic projections. The Fed verdict will have a significant impact on the overall market sentiment. Therefore, the kiwi’s reaction to the GDP release will depend on the market response to the Fed decision and the prevalent risk mood.”
“A big beat on NZ GDP figures is needed for an added-kicker to the New Zealand dollar, in a bid to defy the overbought conditions on the charts and resume its rally beyond 0.7100. A less optimistic Fed combined with discouraging NZ growth numbers could spook the investors, which could knock-off the bird towards the 0.7000 level.”
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