Date: 21 Jun 2017

Last week saw New Zealand’s economy grow less than expected in the first quarter of 2017. It expanded by 0.5 percent in the first quarter, a lower print than either the 0.7 per cent growth forecast that a Reuters poll of economists had expected and, perhaps more importantly, substantially below the Reserve Bank of New Zealand’s (RBNZ) expectation for 0.9 per cent growth. The RBNZ next policy meeting is set for Thursday their time (late Wednesday in Europe). That disappointing first quarter GDP print may focus the RBNZ’s mind while traders will already have noted that although the New Zealand dollar (NZDUSD) has been on the rise in recent weeks, less than a month ago the kiwi was trading below 0.7000 to the US dollar. Given the GDP data, perhaps the risk is that the RBNZ adopts a slightly more dovish tone than expected.

The RBNZ next policy meeting is set for Thursday their time (late Wednesday in Europe). That disappointing first quarter GDP print may focus the RBNZ’s mind while traders will already have noted that although the New Zealand dollar (NZDUSD) has been on the rise in recent weeks, less than a month ago the kiwi was trading below 0.7000 to the US dollar. Given the GDP data, perhaps the risk is that the RBNZ adopts a slightly more dovish tone than expected.

Written by Neal Kimberley, External Currency Analyst.