NZ Dollar Retreats After Rallying on Better-than-Expected GDP

The New Zealand dollar retreated today following yesterday’s gains. The rally was a result of a faster-than-expected growth demonstrated by New Zealand’s economy in the previous quarter.
Statistics New Zealand reported yesterday that gross domestic product grew by 0.7% in the September quarter from the previous three months, beating the median forecast of a 0.5% increase. Year-on-year, the economy expanded by 2.7%. The main contributor to the growth of services industries, which make up two-thirds of the economy, was the expansion of retail and accommodation by 2.4%. It was the biggest increase in eight years. On the negative side, the GDP growth in the June quarter got a big negative revision from 0.5% to just 0.1%.
Also released by Statistics New Zealand yesterday, a report on the trade balance showed a deficit of NZ$735 million in November, down from NZ$1,039 million in the previous month. Nevertheless, the deficit was bigger than NZ$700 million predicted by economists.
As for today’s data, the Reserve Bank of New Zealand released a report on credit card spending, which showed an increase of 4.5% in November from a year ago that followed the 2.3% gain in October.
NZD/USD fell from 0.6606 to 0.6595 as of 7:44 GMT today. EUR/NZD gained from 1.6825 to 1.6854. NZD/JPY edged down from 72.24 to 72.07.

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