NZD/USD recovers its losses above 0.5930 following stronger New Zealand GDP data
- NZD/USD edges higher to 0.5940 after an upbeat growth number.
- The Federal Reserve (Fed) maintained interest rates unchanged at 5.25-5.50% range at its September meeting.
- New Zealand economy expanded 0.9% in Q2 vs. 0% in Q1.
The NZD/USD pair recovers its recent losses around 0.5937 during the early Asian session on Thursday. The US Dollar Index (DXY) rose to 105.44 after retreating to 104.60 after the FOMC September meeting. Meanwhile, US Treasury yields surged, with the 10-year yield hitting 4.40%, the highest since 2007, and the 2-year yield reaching 5.17%, which was the highest since 2006. NZD/USD currently trades near 0.5938, up 0.17% on the day.
The Federal Reserve (Fed) maintained interest rates unchanged at the 5.25-5.50% range on Wednesday. Officials are convinced that they could lower inflation without damaging the economy or leading to massive job losses. According to the Fed's updated quarterly projections, the benchmark overnight interest rate may be raised one more time this year to a peak 5.50% to 5.75% range, and rates may remain significantly tighter through 2024 than previously anticipated.
The latest data released by Statistics New Zealand revealed on Thursday that the New Zealand economy expanded 0.9% during the second quarter, following 0% in the previous reading. The market consensus was for a 0.5% expansion. On an annual basis, the second-quarter GDP expanded by 1.8%, compared with the 2.2% growth in Q1 while beating estimates of a 1.2% increase. In response to the better-than-expected data. the Kiwi reverses its Wednesday's losses and acts as a tailwind the for NZD/USD pair.
Looking ahead, the US weekly Jobless Claims, the Philly Fed, and Existing Home Sales will be released on Thursday. Traders will digest the Fed meeting impact and take cues from these figures, which could give a clear direction to the NZD/USD pair.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
