New Zealand Dollar Rallies on Stronger-Than-Expected GDP Growth
The New Zealand Dollar (NZD) gained ground on Thursday as the country's GDP growth beat expectations in the second quarter. Statistics New Zealand reported that the economy expanded by 0.2% QoQ, exceeding market forecasts of 0.1% growth.
Despite the positive news, the NZD/USD pair struggled to extend its rebound due to the US Dollar's (USD) strength. The Federal Reserve raised its benchmark interest rate by 25 basis points (bps) on Wednesday, bringing the target range to 3.75%-4%. Fed Chair Kevin Warsh justified the decision by saying that inflation has remained too high for too long.
The prospect of further monetary policy tightening in the US and geopolitical tensions in the Middle East continue to limit risk appetite and support the safe-haven US Dollar. The NZD/USD pair is currently trading around 0.5730, up 0.35% on the day.