New Zealand GDP Q3: Better than expected data could keep the bird flying high

The Gross Domestic Product (GDP), released by Statistics New Zealand, has been released as follows:

New Zealand GDP SA (QoQ) Q3: -3.7% (exp -4.1%; prev 2.8%) - GDP (YoY) Q3: -0.3% (exp -1.4%; prev 17.4%).

NZD/USD implicaitons

The US dollar was pressured in the aftermath of the hawkish Federal reserve outcome, potentially due to irregular flows in holiday market conditions as traders square up for the year. 

The kiwi, as a consequence, flew to a high of 0.6787. The better than expected GDP should help to underpin the kiwi for the day ahead. However, it has failed to move the needle so far as traders are only just coming through the door in Asia and the spreads are unreliable at this time of the day. 

Why it matters to traders?

The Gross Domestic Product (GDP), released by Statistics New Zealand, highlights the overall economic performance on a quarterly basis. The gauge has a significant influence on the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, in turn affecting the New Zealand dollar. A rise in the GDP rate signifies improvement in the economic conditions, which calls for tighter monetary policy, while a drop suggests deterioration in the activity. An above-forecast GDP reading is seen as NZD bullish.