The New Zealand dollar slumped today after the reports showed that the current account deficit widened, while the economy of the New Zealand deteriorated, worsening the outlook for the New Zealand dollar and decreasing demand for it.
The current account deficit was NZ$1,770 million in the third quarter, rising from the deficit of NZ$0.99 million in the second. The New Zealand gross domestic product was down 0.2 percent in the September third quarter, following the 0.1 percent increase in the Second quarter. The economist predicted the same 0.1 percent growth in the third quarter of this year.
New Zealand fails to benefit from the growing demand in emerging markets, decreasing the possibility of the interest rates hike anytime soon. This, in turn, damps the demand for the kiwi, as the New Zealand currency is often called.
NZD/USD slumped from 0.7437 to 0.7403 today as of 22:47 GMT. EUR/NZD went up from 1.7597 to 1.7687, while NZD/JPY dropped from 62.28 to 61.85.
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