New Zealand GDP coming up at 2245 GMT
The New Zealand dollar is in the midst of an extended struggle. It's down another 27 pips today and is less than a quarter-cent away from the May low after five consecutive daily declines.
Whether it breaks or bounces likely depends on today's GDP report. It's the first look at Q1 GDP and expected to show a solid 0.5% q/q rise. That's a slight slowdown from 0.6% but still at a respectable +2.0% annualized rate. In year-over-year terms, it will mean growth of 2.7%, which will match the lowest since 2014.
The GDP chart highlights the RBNZ's challenge. Growth is solid but it's not accelerating and as the housing market cools, there is no impetus for rate cuts or hikes.
Technically, the May low of 0.6850 is key. "A move below that level, and the swing low from December 2017 at 0.6816 and the November 2017 low at 0.67805 will be targeted," he writes.
Q1 data is a bit dated at this point but it might only take a reading of +0.4% or below to break support. Economist estimates range from that to +0.7% but note that yesterday's current account deficit was on the strong side so there is a slight upside bias.
