Skip to content NZDUSD Fundamental Analysis – 17-June-2024
NZD/USD—The New Zealand dollar has recently dropped to about $0.611, pressured by the strong US dollar. This decline follows the Federal Reserve’s recent projections, which suggested only one potential rate cut this year, possibly in December.
Supporting this outlook, Minneapolis Fed President Neel Kashkari described it as a ‘reasonable prediction’ that the Fed would cut interest rates once in 2024.
New Zealand Services Sector Hits Low
Domestically, New Zealand’s services sector experienced a significant decline in May, hitting its lowest point since August 2021. Notably, this is the weakest performance for a non-COVID lockdown month since the survey began 2007.
This downturn aligns with an economy already in recession, prompting markets to fully price in a rate cut by the Reserve Bank of New Zealand (RBNZ) in November. However, the RBNZ suggested last month that any rate cuts are unlikely until mid-2025.
Summary
As investors await the first-quarter GDP data released this week, economists predict a modest year-on-year growth of 0.2%. This data will be crucial for understanding the economic landscape and guiding future decisions. Staying informed about these developments can help investors and businesses make strategic decisions in a volatile economic environment.
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