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NZ Dollar Lower As Treasury Warns Of Recession In 2023
(RTTNews) - The NZ dollar fell against its major counterparts in the European session on Wednesday, as New Zealand's Treasury predicted a recession in late 2023.
In the Half Year Economic and Fiscal Update, Treasury said that the economy will contract in the second, third and fourth quarters of 2023.
Finance Minister Grant Robertson said that the economy is forecast to contract by 0.8 percent in the 2023 calendar year.
Caution prevailed ahead of the Federal Reserve's monetary policy announcement, due later in the day.
Although the Fed is expected to raise rates by 50 basis points, investors fear the Fed would hint at a higher peak in interest rates.
The kiwi remained lower against the greenback, with the pair trading at 0.6436. The next possible support for the currency is seen around the 0.62 level.
The AUD/NZD pair firmed to 1.0664, its highest level since December 2. Next key support for the kiwi is seen around the 1.08 level.
The kiwi was down against the euro and the yen, at 5-day lows of 1.6558 and 86.78, respectively. The kiwi is seen finding support around 1.68 against the euro and 85.00 against the yen.
Looking ahead, U.S. export and import prices for November are scheduled for release in the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate. Economists widely expect the Fed to raise rates by 50 basis points to a range of 4.25 percent to 4.50 percent.
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