When is New Zealand GDP report and how could it affect NZD/USD?

Early Thursday in Asia (21:45 GMT on Wednesday), the market sees fourth quarter (Q4) Gross Domestic Product (GDP) data from New Zealand.

Considering the survey period including a minor time of the coronavirus (COVID-19)-led lockdowns in Auckland, the key data loses its value. However, recent updates from the New Zealand Institute of Economic Research (NZIER) and the RBNZ are contrasting and make the case event interesting for the NZD/USD traders.

The forecast suggests, GDP to shrink 0.1% versus 0.14% prior on a QoQ basis, which in turn will lead to a 0.5% YoY number against 0.4% previous readout.

Ahead of the release, the Australia and New Zealand Banking Group (ANZ) said,

We also have NZ Q4 GDP due at 10.45 am today. We’re above consensus at 0.5% but there are a lot of crosscurrents and the spread of expectations is wide.

Westpac follows the footsteps while saying:

We expect a 0.3% drop in GDP for the December quarter (consensus is +0.2%), following a 14% rebound in September as Covid-19 restrictions were lifted. The absence of international tourism has disrupted the seasonal patterns in the data. We expect to see weaker outturns in the spring and summer months, and higher than normal growth in winter.

How could the GDP affect NZD/USD?

NZD/USD stays firm around mid-0.7200s ahead of the NZ GDP data as the recent Fed decision and press conference propelled the quote. However, the odds of the GDP to trim some of the gains are high. In that case, the NZD/USD may revisit the sub-0.7200 area but further declines may be limited. Alternatively, a surprise jump in the headlines economic figure will provide extra strength to the Kiwi pair buyers that are currently cheering the Fed’s inability to provide a hawkish decision.

Technically, the pair couldn’t break 21-day SMA, at 0.7245 now, on a daily closing basis, despite the latest rally, which in turn signals a pullback. However, 50-day SMA near 0.7215 can test the bears before directing them to an ascending trend line from December 21, 2020, currently around 0.7115.

Key notes

New Zealand GDP Preview: The Auckland lockdown threatens the economic turnaround

NZD/USD drops back towards 0.7150 amid pre-FOMC technical selling pressure

About New Zealand Gross Domestic Product (GDP)

The Gross Domestic Product released by the Statistics New Zealand is a measure of the total value of all goods and services produced by New Zealand. The GDP is considered as a broad measure of New Zealand economic activity and health. Generally speaking, a high reading is seen as positive (or bullish) for the NZD, while a falling trend is seen as negative (or bearish) for the NZD.