NZD/USD trades with mild gains above 0.6000, New Zealand economy grows faster than expected in Q1

• NZD/USD posts modest gains around 0.6030 in Thursday’s early Asian session.

• New Zealand's economy grew faster than expected in Q1, supporting the Kiwi.

• The Fed kept its key borrowing rate targeted in a range between 4.25%-4.50% on Wednesday. 

The NZD/USD pair trades with mild gains near 0.6030 during the early Asian session on Thursday. The New Zealand Dollar (NZD) strengthens against the Greenback due to the stronger-than-expected New Zealand’s Gross Domestic Product (GDP) report. US markets will be closed on Thursday for the Juneteenth holiday.
Data released by Statistics New Zealand on Thursday showed that the country’s GDP grew by 0.8% QoQ in the first quarter (Q1), compared with a 0.5% expansion (revised from 0.7%) in the fourth quarter. This reading came in above the market consensus of 0.7%. 

Meanwhile, the first-quarter GDP contracted by 0.7% YoY, compared with a fall of 1.3% (revised from -1.1%) in Q4, stronger than the estimation of a 0.8% decline. The upbeat New Zealand data provides some support to the Kiwi against the US Dollar. 

The Federal Reserve (Fed) on Wednesday decided to keep its interest rates steady amid expectations of higher inflation and lower economic growth. Fed officials continued to pencil in two rate reductions later this year. However, it expects one rate cut for both 2026 and 2027. During the press conference, Fed Chair Jerome Powell said that there is time to wait for more clarity before deciding on policy.

Reuters reported on Wednesday that the US military is also bolstering its presence in the Middle East, prompting speculation about US intervention that investors fear could widen the conflict in the region. Any signs of escalation in the Middle East could boost the safe-haven flows and benefit the Greenback.