NZ Dollar Slides On Weak GDP Data

The New Zealand dollar weakened against other major currencies in the Asian session on Thursday, after data showed the nation's gross domestic product contracted in the fourth quarter of 2022.

Statistics New Zealand showed that New Zealand's gross domestic product contracted a seasonally adjusted 0.6 percent on quarter in the fourth quarter of 2022. That missed forecasts for a decline of 0.2 percent following the downwardly revised 1.7 percent increase in the three months prior.

On an annualized basis, GDP climbed 2.2 percent, that missed a forecast of 3.3 percent following the 6.4 percent increase in the third quarter.

Asian Markets traded lower, following a fresh sell-off in the banking sector amid concerns about the debt woes of Swiss lender Credit Suisse, and the collapse of Silicon Valley Bank and Signature Bank in the U.S. last week. This raised concerns the global economy could see a significant slowdown in the near to medium term.

Credit Suisse shares fell nearly 25 percent in the Swiss market after Saudi National Bank, the bank's largest investor, reportedly said it would not provide any more funding to the Swiss lender.

Wednesday, the NZ dollar was retreating from early highs against its major counterparts.

In the Asian session today, the NZ dollar fell to a 2-month low of 81.67 against the yen from yesterday's closing value of 82.57. The kiwi may find support around the 80.00 area.

Against the U.S. dollar, the kiwi dropped to a 3-day low of 0.6139 from yesterday's closing quote of 0.6188. If the kiwi extends its downtrend, it is likely to find support around the 0.60 area.

The kiwi slipped to a 3-day low of 1.0776 against the Australian dollar from yesterday's closing value of 1.0687. The AUD/NZD pair is likely to find their support around the 1.09 level.

In economic news, the unemployment rate in Australia came in at a seasonally adjusted 3.5 percent in February, the Australian Bureau of Statistics said on Thursday. That was beneath expectations for 3.6 percent and was down from 3.7 percent in January. The participation rate was 66.6 percent, in line with expectations and up from 66.5 percent a month earlier.

Against the euro, the kiwi edged down to 1.7232 from yesterday's closing value of 1.7087. The next support level for the kiwi is seen around the 1.74 area.

Looking ahead, Canada final wholesale sales data for January. U.S. building permits, housing starts, export and import prices, all for February, and U.S. weekly jobless claims data are due to be released in the New York session.

At 8:15 am ET, European Central Bank's Monetary policy decision is due. The central bank has signaled for another 50-basis point increase on today's meeting.

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