img NZ
img AUS
img CDN
img US
Call us now: 0800 00 56 17
imgOnline Dealing Login

Kiwi Loses Ground After Worse Than Expected GDP Number

Published December 21, 2018

The Kiwi Dollar opens lower today as markets were surprised by a weaker than expected GDP number yesterday. The NZD fell by over a cent after the announcement before steadying overnight and making back some of the earlier losses. The USD was weaker vs most major currencies, reversing gains made after yesterdays Fed rate hike. Tonight sees some major USD data releases including Durable Goods Orders and Q3 GDP.

NZ GDP Below Market Expectations

NZ annual growth was reported at 2.6% vs market expectations of 2.8%, suggesting weaker momentum within the NZ economy. The latest figures have prompted some analysts to revise their interest rate expectations with one major NZ bank now calling for a series of interest rate cuts by the RBNZ in 2019. This view is not shared by all market participants with ratings agency Fitch raising its growth forecast for New Zealand in 2018 and 2019.

UK and Japan leave rates unchanged

The Bank of England kept interest rates unchanged this morning as the Monetary Policy Committee voted to hold at 0.75%. UK policy makers stated that they now see inflation slowing below the 2% target as soon as January. Uncertainty surrounding the United Kingdom’s exit from the European Union was viewed as intensifying by the central bank. Meanwhile Japanese rates remained on hold with the Bank of Japan leaving stimulus settings unchanged last night, with risks to inflation growing. Additionally, the BOJ left its yield curve control program and asset purchases unchanged.