In This Article:
The New Zealand and Australian Dollars are trading higher early Thursday, mostly on a continued reaction to dovish comments from the U.S. Federal Reserve late in the session on Wednesday.
The Kiwi is showing little reaction to a miss in the New Zealand Quarterly Gross Domestic Product report, while Aussie traders are preparing for the release of reports on the labor market, the Reserve Bank of Australia (RBA) Bulletin and a speech by RBA Assistant Governor Kent.
At 23:53 GMT, the NZD/USD is trading .7248, up 0.0008 or +0.12% and the AUD/USD is at .7811, up 0.0012 or +0.16%.
Kiwi, Aussie Rise After Fed Holds Policy Steady
The New Zealand and Australian Dollars reversed course to close higher on Wednesday after the U.S. Dollar plunged after the Fed predicted a fast economic recovery from the coronavirus pandemic and said it would maintain its interest rate at close to zero.
In its statement following its two-day policy meeting, the Federal Reserve projected a rapid jump in U.S. economic growth and inflation this year as the COVID-19 crisis winds down, and repeated its pledge to keep its target interest rate near zero for years to come.
The greenback plunged along with Treasury yields while the Kiwi and Aussie rose sharply after Fed Chair Jerome Powell said during a news conference that it is too early to discuss tapering-off measures to support the struggling economy.
New Zealand Posts 1.0% drop in GDP in Q4
New Zealand’s gross domestic product fell 1.0% in the fourth quarter of last year, after a record rebound in the previous quarter as the country successfully contained the coronavirus, official data showed on Thursday.
The result was below economists’ forecasts in a Reuter poll for production-based GDP growth of 0.1% for the quarter.
It was also below the forecast of the Reserve Bank of New Zealand which had penciled flat growth for the period.
Annual GDP fell 0.9%, Statistics New Zealand said in its report, compared to expectations of a 0.5% rise.
Daily Forecast
At 0:30 GMT, AUD/USD investors will get the opportunity to react to the latest data on Employment Change, Unemployment Rate and the RBA Bulletin. At 01:05 GMT, RBA Assistant Government Kent is scheduled to give a speech.
The Aussie Employment Change is expected to show the economy added 30.5K jobs in February. The Unemployment Rate is expected to dip to 6.3%. Better-than-expected reports should be bullish for the AUD/USD.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire