The New Zealand dollar was among the weakest currencies on the Forex market today amid the risk-negative sentiment among investors. Domestic macroeconomic data was also extremely bad, though not as bad as pessimistic forecasts.
Statistics New Zealand reported that gross domestic product shrank by as much as 12.2% in the June quarter. That was the biggest decline on the record. Yet it was still not as big as the 12.5% decline predicted by economists. Analysts were speculating after the report on how it will affect the monetary policy of the Reserve Bank of New Zealand. Some of them argued that the RBNZ will remain unfazed, preferring a wait-and-see approach at the next meeting, wanting to see more data before making any changes to its policy.
Markets were in the risk-off mode today as stocks in Asia and Europe dropped, and US stocks are also expected to demonstrate losses after American markets open. Analysts speculated that the reason for the drop was yesterday’s monetary policy statement from the Federal Reserve. While it was rather dovish, it looks like markets were expecting even more dovishness, perhaps even an expansion of monetary stimulus. Though it seems that the mood has improved a bit, considering that the kiwi managed to trim its losses.
NZD/USD fell from 0.6730 to 0.6723 as of 11:40 GMT today but rebounded from the daily low of 0.6675. EUR/NZD was flat at 1.7547, retreating from the session high of 1.7621. NZD/JPY declined from 70.63 to 70.34, reaching the low of 70.03 intraday.
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