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2nd quarter NZ GDP surprises to the downside.

Written by Sam Coxhead on September 22nd, 2011.      0 comments

11:05 AM (NZT) The just released 2nd quarter NZ GDP number showed that growth slowed to +.1%. The expectation was for a .5% number.  This is a very weak number, although activity is expected to have picked up in the 3rd quarter. The NZD has seen further weakness since the release of this data and is currently close to its lows against the USD and AUD.
In busy markets offshore this was distinct risk aversion that saw the US dollar in hot demand. The Bank of England monetary policy meeting minutes were very much as expected. Their tone points towards further quantitative easing at some stage in the coming months as the UK economy struggles for growth. The US Federal Reserve also left the market unsurprised at its announcement. It will lengthen its Treasury bond holdings average maturity. The effect of this will lower long term interest rate and hopefully help support home prices. The equity markets were lower before and after the announcement as banking stocks remain under intense pressure.
So the US dollar rebound continues as the global growth prospects look increasingly bleak. Expect both the NZD and AUD to remain under pressure. The Greek debt saga remains of intense focus. It is looking increasingly likely that Greece will appease the ECB/IMF/EU officials and get the next 8 billion tranche of funding. But looking forward Greece’s situation is looking increasingly uncertain, and this will keep the markets on edge.
          Past 24 hours
  Current level Pre- NZ GDP  % Chge NZ GDP   Low High
NZD/USD 0.7995 0.8063 -0.85%   0.7990 0.8238
AUD/USD 1.0057 1.0078 -0.21%   1.0030 1.0292
NZD/AUD 0.7952 0.8001 -0.62%   0.7939 0.8030
AUD/NZD 1.2575 1.2498 0.61%   1.2453 1.2596
NZD/GBP 0.5157 0.5198 -0.80%   0.5152 0.5257
NZD/EUR 0.5890 0.5930 -0.68%   0.5879 0.6017
NZD/YEN 61.20 61.77 -0.93%   61.12 63.04
NZD/CAD 0.8130 0.8109 0.26%   0.8036 0.8197