NZD/USD Struggles Amid Concerns Over New Zealand's Q4 GDP ⤵️

Despite a recent uptick in the value of the Kiwi currency, the NZD/USD pair is struggling to overcome intraday losses. The weaker-than-expected Q4 GDP figures from New Zealand have raised concerns about a potential credit rating cut for the country. The recent troubles faced by major banks in the US and Europe have also sparked fears of a return to the 2008 financial crisis, which has had a negative impact on riskier assets like the Antipodeans.

Traders are keeping an eye on Goldman Sachs’ economic outlook and China’s threat to European shares as they navigate a sluggish market session. Despite a slight recovery in intraday losses, the NZD/USD pair remains depressed near 0.6160, down for the second consecutive day.

The downbeat Q4 GDP figures from New Zealand have weighed heavily on the Kiwi pair, with YoY figures also falling short of expectations. Concerns about New Zealand’s credit rating have been raised due to the nation's current account deficit remaining too large. Meanwhile, the latest bank fallouts in the US and Europe, including Credit Suisse, have heightened fears of another financial crisis.

On the positive side, news that Credit Suisse is seeking to borrow up to CHF50 billion from the Swiss National Bank to strengthen liquidity has eased fears somewhat. Anonymous sources have also suggested that US banks are less vulnerable to the Credit Suisse debacle. Furthermore, emergency talks by the Bank of England and market chatter suggesting no immediate negative reaction from the Federal Reserve and ECB during their monetary policy meetings have helped to calm risk aversion.

Looking ahead, traders will be watching for any major movements in the bond market and any further developments regarding the bank fallouts. Second-tier US data about employment, manufacturing, and housing activities may also have an impact on the NZD/USD pair.

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