FX.co ★ New Zealand Dollar Slips Despite Strong GDP Data

On Thursday, the New Zealand dollar dropped to approximately $0.598, marking its lowest value in over two weeks, despite surprising economic growth data. In the March quarter, New Zealand's GDP increased by 0.8%, surpassing predictions of a 0.7% rise, and outpacing a previously revised 0.5% growth in the previous quarter. On an annual basis, GDP declined by 0.7%, slightly better than the anticipated 0.8% decrease. This data bolsters the expectation that the Reserve Bank of New Zealand will maintain steady interest rates in July. The RBNZ has recently hinted that it is nearing the conclusion of its easing cycle, with the market forecasting just one more rate cut later in the year. On the international front, the New Zealand dollar faced downward pressure from a strengthening US dollar. This came after the Federal Reserve left rates unchanged and indicated a more gradual approach to future rate cuts. Additionally, Fed Chair Jerome Powell adopted a cautious stance, highlighting the potential for inflation to rise due to President Trump's tariff policies. Further compounding this was geopolitical uncertainty, as investors considered the possibility of US involvement in the Iran-Israel conflict.