NZD/USD stays calm above 0.7100 ahead of New Zealand GDP data

• NZD/USD looks to close modestly higher on Wednesday.
• New Zealand economy is expected to grow at an annual rate of 16.3% in Q2.
• US Dollar Index stays near 92.50 ahead of US Retail Sales data.

After dropping to 0.7074 earlier in the day, the NZD/USD pair reversed its direction and remains on track to close in the positive territory a little above 0.7100.

Eyes on NZ GDP data

Disappointing Retail Sales and Industrial Production data from China weighed on the NZD during the Asian trading hours on Wednesday. 

In the second half of the day, the improving risk sentiment made it difficult for the greenback to gather strength despite rising US Treasury bond yields and fueled NZD/USD rebound. Currently, the US Dollar Index is posting modest daily losses at 92.55.

Earlier in the day, the data from the US showed that the NY Fed Empire State Manufacturing Index improved to 34.3 in September from 18.3 in August. On a negative note, the Fed reported that Industrial Production expanded by 0.4% in August, missing the market expectation for an increase of 0.5%.

On Thursday, Statistics New Zealand will release the GDP report, which is expected to show that the economy grew at an annual rate of 16.3% in the second quarter. A stronger-than-expected print could help the NZD outperform its American counterpart in the first half of the day. On the other hand, NZD/USD is likely to turn south in case GDP print falls short of the market consensus.

Technical levels to watch for