NZD/USD refreshes two-day high at 0.6030 amid an upbeat NZ GDP

• NZD/USD is confidently auctioning above 0.6000 on higher-than-expected NZ GDP data.
• The kiwi economy has grown by 0.4% and 1.7% on an annual and quarterly basis.
• Odd of a full percent rate hike by the Fed has strengthened dramatically.

The NZD/USD pair has established above the psychological resistance of 0.6000 as Statistics New Zealand has reported higher-than-expected Gross Domestic Product (GDP). The economic data has landed higher at 1.7% against the expectations of 1% and the prior contraction of 0.2% on a quarterly basis. Also, the annual reading at 0.4% is higher than the forecasts of 0.2% but remained lower than the former figure of 1.2%.

The kiwi GDP data will have a significant impact on the strategy building of the Reserve Bank of New Zealand (RBNZ) policymakers against the ramping up inflationary pressures. There is no denying the fact that the RBNZ is prepared to sacrifice the growth prospects over containing the red-hot inflation. And, the inflation rate recorded at 7.3% in the second quarter is sufficient to cripple an economy. Well,  

This week, investors will also focus on the Business NZ PMI, which indicates the business conditions in the economy. As per the preliminary estimates, the economic data will decline marginally to 52.5 against the prior release of 52.7.

Meanwhile, the US dollar index (DXY) has turned sideways amid the unavailability of any potential trigger, which could provide a decisive move in the counter. After a higher-than-expected reading of the US Consumer Price Index (CPI) data, the commentary from Federal Reserve (Fed) policymakers will be keenly watched by the market participants.

No doubt, the commentary will dictate the continuation of the restrictive stance on monetary policy but unexpectedly increasing core CPI has strengthened the odds of a full 1% rate hike in the September monetary policy meeting.