NZD Surges on Strong Q2 GDP Growth and Dovish RBNZ Surprise

The New Zealand Dollar (NZD) has gained momentum after the country's GDP growth rate accelerated in Q2, reaching 0.2% quarter-over-quarter and 2.6% year-over-year.

This strong economic data has boosted investor confidence in the NZD, causing it to trade at around 0.5740 against the US Dollar (USD) during European hours on Thursday.

The Reserve Bank of New Zealand's (RBNZ) dovish surprise in its September meeting, where policymakers signaled a potential for only one more 25 basis point hike to 3.0%, has also contributed to the NZD's appreciation.

Despite this, analysts at ING caution that the policy path remains data-dependent and that elevated energy prices may lead to upward revisions in policy projections by year-end, potentially pushing interest rates higher.