NZD/USD: GDP-led recovery fizzles as NZ election looms

The bears are back in control during the Asian trades, sending the NZD/USD pair back towards post-FOMC lows reached near 0.7320, as looming elections combined with downbeat NZ credit card spending data weigh.

NZD/USD back to test 0.73 handle?

The Kiwi faded a minor-recovery attempt triggered by upbeat New Zealand GDP figures, as tumbling domestic stocks combined with a sharp drop seen in the NZ credit card spending data collaborated to the renewed weakness in the prices.

NZ GDP, June 2017 quarter review - Westpac

Moreover, looming uncertainty over New Zealand’s national election also continue to weigh on the sentiment around the NZD. However, the main driver behind the recent declines in the spot is the hawkish FOMC decision inspired broad based US dollar rise.

Fed hinted at a Dec Fed rate hike, while resorted to an aggressive path for future rate increases. Also, an October start time to the balance reduction process was announced by the Fed late-Wednesday.

Later today, markets will continue to digest the unexpectedly hawkish Fed outcome, as attention shifts towards the final poll ahead of the NZ election due out at 0600 GMT and a fresh batch of US macro updates slated for release in the NA session.

NZD/USD Levels to consider                                                                              

NZD/USD tested daily pivot at 0.7353, with 0.7307/06 (5 & 50-DMA) still guarding 0.7285/83 (100 & 10-DMA) and a break back below 0.7243 (20-DMA) are key near-term downside areas. To the topside, a test of 0.7373 (Aug 10 high) due on the cards, which could open doors towards 0.7400 (round number).