New Zealand Dollar Edged Higher After Firm GDP Data
- New Zealand GDPgrew 1.4% in 3Q vs. 1.1% Expected, 0.3%in 2Q
- Annual Growth Rate Accelerated to the Highest in Six Years at 3.5%
- NZ Dollar Rallied as Data Reinforced RBNZ Interest Rate Hike Bets
The New Zealand Dollar spiked upward after economic growth accelerated more than economists expected in the third quarter.GDP expanded 1.4 percent having added 0.3 percent in the second quarter, topping economists’ expectations for a 1.1 percent gain. That marks the fastest pace of economic growth in almost four years.
The pickup in economic activity reinforced speculation that the RBNZ will begin to raise interest rates next year. As it stands, the markets are pricing in 125 basis points in tightening over the coming 12 months. That is the most hawkish policy outlook in the G10. Furthermore, RBNZ Governor Wheeler said earlier this month that he expects the bank will raise the benchmark lending rate by 225 basis points over the coming 2 years.
Data at a Glance:
- New Zealand 3Q GDP YoY:3.5% vs. 3.3% Expected, from 2.3% in 2Q. (Revised lower from 2.5%)
- New Zealand 3Q GDP QoQ:1.4% vs. 1.1% Expected, from 0.3%in 2Q. (Revised higherfrom 0.2%)
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NZD/USD 5-minute Chart: December 18, 2013
Chart created by Cheng Li using Marketscope 2.0
-- Written by Cheng Li, DailyFX Researcher. Feedback can be sent to email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.