New Zealand GDP grew 1.0 qoq in Q2, doubled the speed of 0.5% in Q1 and beat expectation of 0.8% qoq. That’s also the fastest quarterly rate in two years. Over the year ended June 2018, growth also accelerated to 2.8% yoy, up fro 2.6% yoy and beat expectation of 2.5% yoy. Growth was broad based with 15 of 16 industries up. GDP per capita also gained 0.5%.
Looking at more details, the 1.0% quarterly rise in services was the main contributor. Goods-producing industries were up 0.9%. Primary industries grew 0.2%, with strong growth in agriculture, forestry, and fishing offset by a significant fall in mining.
NZD/USD’s strong rally today solidify the case that 0.6500 is a short term bottom. There is prospect of it being a medium term bottom considering bullish convergence condition in daily MACD. But it’s early to tell as NZD/USD is held well below 0.6726 resistance. For now, outlook stays bearish as we’d still expect recent down trend to extend lower to 161.8% projection of 0.7557 to 0.6779 from 0.7436 at 0.6177 on down trend resumption.
