New Zealand is set to report its second-quarter GDP growth, with forecasts indicating a sharp slowdown to 0.1% quarter-on-quarter, down from 0.8% in the first quarter of the year [1]. In contrast, the annual GDP figure is expected to rise to 2.3% from 1.5%, due to weaker quarters dropping out of the year-on-year comparison, making both the stalling quarterly growth and the annual pickup accurate reflections of the data [1].
The Reserve Bank of New Zealand (RBNZ) previously raised the Official Cash Rate (OCR) to 2.75% on September 2, citing an economic recovery with inflation at 4.1%. This upcoming GDP release will be the first concrete data point since that rate hike [1]. Meanwhile, the US Federal Reserve increased its own rate to 3.75%-4.00% on Wednesday and signaled another hike, widening the interest rate gap between the US and New Zealand to over one percentage point [1].
The NZD/USD currency pair is trading just above 0.5700, its lowest level since early July, with the session high remaining below 0.5800. The pair has been on a downward trend since late August, when it was just under 0.6000, and has consistently posted lower highs. It remains below both its 50-day and 200-day Exponential Moving Averages, which have converged near 0.5850, a level not breached since early September [1]. The daily Stochastic Relative Strength Index (Stoch RSI) is at the bottom of its range, a position last seen during the June sell-off that brought NZD/USD to just above 0.5600 [1].
No forward-looking statements or analyst opinions are provided in the source article.
CONCLUSION
New Zealand's GDP growth is expected to slow sharply on a quarterly basis, while annual growth appears stronger due to base effects. The NZD/USD remains under pressure, trading at multi-month lows as the interest rate differential with the US widens. Market sentiment is negative, with technical indicators signaling continued weakness for the Kiwi.