6:45pm (NY Time) NZ GDP q/q   Forecast 0.5%  Previous 0.8%
ACTION: NZD/USD         BUY 0.8%            SELL 0.2%

New Zealand GDP is a high impact news release scheduled on a quarterly basis… The expected consensus number is 0.5%, therefore if we get a 0.3% of deviation, we should see market move 40 pips within the hour.  NZD has been benefitting from the recent risk appetite sentiment as the result of China’s announcement of ending its peg with USD, and the fact that RBNZ has started its rate tightening cycle. If we get a positive reading on the GDP number, expect NZD/USD to rise and retest recent resistance levels; if the GDP remains heavily to the downside, a decent retracement should be expected of NZD and 0.6800 should provide strong support.

Definition

“Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation’s currency. GDP is the broadest measure of activity and the primary gauge of the economy’s health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation’s currency.”

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