The NZD is having a lower performance on all fronts. Financing the great current account deficit of New Zealand (-5.7% of GDP in the first quarter) is more difficult during periods of global risk aversion, when foreign capital flows tend to dry, BBH FX analysts report.
The RBNZ remains stable as the data improves
“New Zealand GDP growth in the first quarter exceeded expectations. Real GDP increased 0.8% compared to the anterior quarter against 0.5% in the fourth quarter. The consensus had planned 0.7% while the RBNZ GDP model implied a growth of 0.6%. The growth in the first quarter was driven by business services and Manufacturing. “
“The improvement in the economic activity of New Zealand supports the position of the RBNZ that the relaxation cycle is in pause. Governor Christian Hawkesby recently emphasized that” when we meet again in July, a new cut in the OCR is not an accomplished fact. “
“We are really in a phase in which we are taking steps considered, dependent on the data.” The swap market implies 17% probabilities of a rate cut at the next meeting of July 9 and 25 basic points of total relaxation during the next 12 months so that the policy rate reaches a minimum of 3.00%. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
