NZD Drops Sharply on Wednesday, Attempts to Bounce on Thursday

The New Zealand dollar dropped sharply yesterday after the policy announcement from the US Federal Reserve and extended losses after the release of mixed domestic macroeconomic data. The currency is attempting to bounce today, but by now the kiwi has lost gains it had posted earlier.
The biggest negative factor for kiwi (outside of the Fed announcement) was the disappointing growth of New Zealand’s gross domestic product. Statistics New Zealand reported that GDP rose 0.3% in the September quarter of 2019. The rate of increase was two times slower than 0.6% predicted by economists and also slower than 1.0% registered in the previous three months.
Current account deficit widened from NZ$1.63 billion in the second quarter of this year to NZ$6.15 billion in the third(not adjusted for seasonal variations). It was a bigger figure than NZ$5.94 billion predicted by experts.
On a positive note, the trade balance deficit shrank from NZ$1,317 million in October to NZ$861 million in November. Specialists had forecast a bit higher figure of NZ$880 million.
Another positive indicator was the Westpac/McDermott Miller Consumer Confidence. The index increased to 109.1 in the December quarter from 103.5 in the September quarter. The report commented on the result:

– Consumer confidence picked up again in December, shaking off its mid-year slump.
– With fuel prices down and signs the housing market is firming, households are in the mood to spend heading into the Christmas shopping season. That’s been reinforced by the low level of borrowing rates.
– December’s gains in confidence have been widespread across regions, age brackets and income groups.

NZD/USD was little changed at 0.6762 as of 1:33 GMT today after rising to 0.6781 earlier. EUR/NZD traded at 1.6824 after opening at 1.6808 and falling to the session low of 1.6781. NZD/JPY was almost flat at 76.09 following the rally to the session maximum of 76.32.

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Original from: www.earnforex.com