NZD/USD loses momentum below 0.6200 following the New Zealand GDP data

• NZD/USD loses ground near 0.6175 following the weaker New Zealand GDP data.
• New Zealand’s economy in Q3 contracted by 0.3% QoQ vs. 0.5% prior, below the 0.2% expected.
• The Federal Reserve (Fed) kept the interest rates steady at its December meeting on Wednesday, as widely expected.
• Traders will focus on the US weekly Jobless Claims and Retail Sales.

The NZD/USD pair holds ground around 0.6175 after facing a rejection around the 0.6200 mark during the early Asian session on Thursday. The downbeat New Zealand’s GDP growth numbers drag the New Zealand Dollar (NZD) lower. However, the downside of the pair seems limited as investors digest the outcome of the Federal Reserve meeting.

The latest data from Statistics New Zealand on Thursday revealed that the nation’s economy in the third quarter (Q3) contracted by 0.3% QoQ versus the 0.2% expansion expected and a 0.5% rise prior. Additionally, the annual GDP shrank 0.6% compared with the 1.5% growth in Q2, worse than the market expectation of a 0.5% increase. In response to the data, the Kiwi attracts some sellers against the USD.

On the USD’s front, the Greenback has dropped sharply after the Federal Reserve (Fed) meeting. The central bank decided to keep interest rates unchanged at its December meeting, as widely expected. The Fed now anticipates three rate cuts next year rather than two, according to interest rate projections. Regarding a drop in inflation, the likelihood of the Fed cutting interest rates before the middle of next year has increased.

During the press conference, Fed Chair Jerome Powell said that the inflation battle isn’t over, but central bank policymakers will start to discuss policy easing amid signs of cooling in both inflation and the labor market. The dovish comments from Powell exert some selling pressure on USD.

Looking ahead, market players will keep an eye on the US weekly Jobless Claims and Retail Sales for November, due later on Thursday. On Friday, the Business NZ Purchasing Managers’ Index (PMI) and US S&P Global PM will be released. Traders will take cues from these data and find trading opportunities around the NZD/USD pair.