- NZD/USD gains momentum around 0.6145 following the release of New Zealand GDP on Thursday.
- New Zealand's economy grew 0.2% QoQ in Q1 versus 0% prior, stronger than expected.
- US Retail Sales data last week hinted at an economic slowdown and fuel rate cut expectations.
The NZD/USD pair gains traction near 0.6145 during the early Asian session on Thursday. The pair edges higher on the back of stronger-than-expected New Zealand GDP in the first quarter and the decline of the US Dollar (USD). Investors await the US weekly Initial Jobless Claims, Building Permits, Housing Starts, the Philly Fed Manufacturing Index, and the speech by the Fed’s Barkin for fresh impetus on Thursday.
New Zealand’s economy grew 0.2% on a quarter-on-quarter basis in Q1 from 0% in the previous quarter. The figure came in better than expected, Statistics New Zealand showed on Thursday. On an annual basis, the GDP figure expanded by 0.3% in Q1, compared to the previous quarter’s 0.2% contraction. The New Zealand Dollar (NZD) attracts some buyers after the stronger GDP growth number indicated the country exited recession.
Additionally, Westpac New Zealand's Consumer Confidence Survey reported a decline to 82.2 in consumer sentiment for the second quarter from the previous reading of 93.2.
On the other hand, the recent weaker US Retail Sales report last week spurred the likelihood that the Federal Reserve (Fed) will start to cut interest rates in a few months, which exerts some selling pressure on the Greenback. The markets are now pricing in a nearly 67% chance of a 25 basis points (bps) for a Fed rate cut in September, up from 61% a day ago, according to the CME FedWatch tool. On Tuesday, Boston Fed President Susan Collins said that there are possibilities of one or two interest rate cuts from the Fed later this year, but the central bank must be patient amid volatile readings on inflation.
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