NZD/USD falls to 0.6060 due to the rebound in the USD and the recession of the New Zealand economy

  • The NZD/USD pair falls sharply to 0.6060, while the US Dollar experiences a strong recovery.
  • S&P Global reports that the preliminary manufacturing PMI surprisingly rose to 52.5 in March.
  • NZ's fourth quarter GDP shows the economy was in a technical recession in the second half of 2023.

The NZD/USD pair gives up its intraday gains and turns negative in the early hours of the New York session on Thursday. The New Zealand pair retreats as the US Dollar rebounds strongly from its five-day low at 0.6060. The Dollar Index (DXY) rises strongly to 103.76, as the Federal Reserve (Fed) has revised upward the forecasts for the United States Gross Domestic Product (GDP) for 2024.

The Fed's latest economic projections indicate that the US economy will grow 2.1% in 2024, revised upward from December projections of 1.4%. An optimistic economic outlook bodes well for the national currency.

For its part, S&P Global has published preliminary PMI data for March that is mixed. The agency shows that the manufacturing PMI surprisingly rose to 52.5 from the previous reading of 52.2. Investors expected the manufacturing PMI to decline to 51.7. The services PMI, which represents the services sector, which accounts for two-thirds of the economy, falls at a faster rate to 51.7 from expectations of 52.0 and the previous reading of 52.3.

The attractiveness of risk assets has weakened despite strong market expectations that the Fed will cut interest rates after the June policy meeting. CME's FedWatch tool shows that there is just over a 74% chance that a rate cut will be announced in June, which is a significant increase from the 59% recorded before the Fed meeting.

Regarding the New Zealand Dollar, Statz NZ has reported that the economy was in a technical recession in the second half of 2023. The Gross Domestic Product (GDP) for the fourth quarter of 2023 contracted a surprising 0.1%, while investors expected that the economy would have grown at a similar rate. In the third quarter of 2023, New Zealand's economy also contracted by 0.3%. A weak economic outlook in New Zealand could force the Reserve Bank of New Zealand (RBNZ) to consider an early rate cut.

NZD/USD

Overview
Latest price today 0.6054
Daily change today -0.0027
Today's daily variation -0.44
Today's daily opening 0.6081
Trends
daily SMA20 0.613
50 daily SMA 0.6126
SMA100 daily 0.6132
SMA200 Journal 0.6079
Levels
Previous daily high 0.6086
Previous daily low 0.6024
Previous weekly high 0.6191
Previous weekly low 0.608
Previous Monthly High 0.6219
Previous monthly low 0.6037
Daily Fibonacci 38.2 0.6062
Fibonacci 61.8% daily 0.6048
Daily Pivot Point S1 0.6041
Daily Pivot Point S2 0.6002
Daily Pivot Point S3 0.5979
Daily Pivot Point R1 0.6103
Daily Pivot Point R2 0.6126
Daily Pivot Point R3 0.6165

Source: Fx Street

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