NZ Dollar Flat, Falls vs. US Dollar Ahead of Fed Announcement

The New Zealand dollar has been trading largely flat today, though it registered losses against some of its major rivals, including the US dollar. The likely reason for low volatility on the Forex market was today’s monetary policy announcement from the Federal Reserve as traders are often reluctant to involve themselves in markets ahead of big events.
Yesterday, the Global Dairy Trade Price Index showed a drop of 3.8%. The decline followed a 15.0% jump in the previous report. Dairy is a significant part of New Zealand’s export revenue, making moves of dairy prices important for the economy and currency of New Zealand.
Overnight, Statistics New Zealand reported that the current account deficit shrank to NZ$2.70 billion in the December quarter of the previous year from NZ$3.62 billion in the September quarter (not seasonally adjusted). Economists were expecting a smaller decrease to NZ$2.85 billion. With seasonal adjustments, the deficit was at NZ$2.1 billion.
Stats NZ will release a report on the gross domestic product in the fourth quarter of 2020 at 21:45 GMT today. New Zealand’s economy climbed by 14.0% in the third quarter after sinking by 12.2% in the second quarter. Analysts predicted ahead of the report that it will show a huge slowdown of economic growth to just 0.2%. Such huge swings in the performance of the economy are a result of the COVID-19 pandemic and the subsequent economic recovery that followed the easing of the coronavirus-related restrictions.
NZD/USD fell from 0.7189 to 0.7181 as of 9:28 GMT today. GBP/NZD rose from 1.9316 to 1.9353, touching the maximum of 1.9389 intraday. NZD/CAD traded at 0.8947 after opening at 0.8943 and falling to the session minimum of 0.8933.
If you have any questions, comments, or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

Original from: www.earnforex.com