Kiwi Hits Fresh Lows as NZ GDP Forecast Disappoints
New Zealand's economy is expected to experience slow growth in the second quarter, according to forecasts. The country's Gross Domestic Product (GDP) is predicted to increase by just 0.1% from the first quarter of this year, down from 0.8%. However, when comparing annual figures, the forecast shows a more positive trend, with GDP expected to reach 2.3%, up from 1.5%. This seeming contradiction arises from the fact that the base period for comparison is weaker than the one being replaced.
The Reserve Bank of New Zealand (RBNZ) raised its Official Cash Rate (OCR) to 2.75% on September 2, citing inflation at 4.1% and a recovering economy. The Fed, however, has taken a more aggressive stance, raising its own rate to 3.75%-4.00% this week.
The New Zealand Dollar (NZD) is trading near its lowest level since early July, with the NZD/USD pair hovering around 0.5700. Technical indicators are bearish, with the daily Stochastic Relative Strength Index (Stoch RSI) at the bottom of its band.