NZD/USD Forecast: Kiwi Plunges on Risk Off Despite GDP Rise
- the New Zealand dollar (NZD/USD) experienced a sharp decline Thursday,despite a stronger-than-expected Q1 GDP growth report.
- New Zealand's economy grew by 0.8% in the first quarter of 2025, surpassing the Reserve Bank of New zealand's (RBNZ) forecast of 0.4%. Goods production showed particular strength.
- Specific sectors contributing to the quarterly growth include a 2.4% rebound in transport equipment and machinery, and a similar rise in business services driven by IT-related activity.
the New Zealand dollar (NZD/USD) plummeted on Thursday,defying a robust Q1 GDP report. Geopolitical jitters sparked a sell-off, overshadowing a better-than-expected 0.8% quarterly growth in New Zealand.Though goods production excelled, annual GDP remains down 1.1%, signaling underlying economic fragility. Technical analysis points to further declines, after the pair breached key support levels. Bloomberg News reports fueled the downturn, influencing the NZD/USD pairS performance. Keep an eye on support levels at .5925 and .5900, as further volatility is expected. For actionable insights,visit News Directory 3 for the best financial news. Discover what’s next for the Kiwi.
NZD/USD Plunges Despite New Zealand GDP Growth
Updated June 19,2025
the New Zealand dollar (NZD/USD) experienced a sharp decline Thursday,despite a stronger-than-expected Q1 GDP growth report. The currency’s fall was attributed to increased risk aversion stemming from geopolitical tensions.
New Zealand’s economy grew by 0.8% in the first quarter of 2025, surpassing the Reserve Bank of New zealand’s (RBNZ) forecast of 0.4%. Goods production showed particular strength. However, annual GDP is still down 1.1%, highlighting underlying economic vulnerabilities.
Specific sectors contributing to the quarterly growth include a 2.4% rebound in transport equipment and machinery, and a similar rise in business services driven by IT-related activity. Healthcare also contributed with a 1.4% increase. Goods-producing industries saw a 1.3% increase after a sharp decline in Q4. The services sector, which accounts for 73.6% of GDP,grew at a slower pace of 0.4%.
The NZD/USD pair broke through key support levels, reaching lows not seen as early June. A bloomberg News report about potential U.S. action against Iran triggered the sell-off,overwhelming buyers who had been defending the .6000 level.
Technical indicators suggest further downside potential.The Relative Strength Index (RSI) is trending downward and is below 50. The Moving Average Convergence Divergence (MACD) remains above zero but has crossed the signal line, indicating a shift in momentum.
what’s next
Traders should monitor key support levels at .5925, the late-May low, and.5900, along with the 200-day moving average. The .5990 level, previously a support, may now act as resistance if the bearish trend reverses.