AUD/NZD JUMPS 50 PIPS TO NEAR 1.0750 ON DOWNBEAT NEW ZEALAND Q4 GDP, AUSSIE EMPLOYMENT EYED

AUD/NZD picks up bids to reverse from the lowest levels in a year, jumps nearly 50 pips to 1.0745 after New Zealand’s (NZ) fourth quarter (Q4) Gross Domestic Product (GDP) disappoints Kiwi traders during early Thursday. The figures become even more worrisome after the global rating giant S&P warned of NZ rating cut.

NZ Q4 GDP slide to -0.6% QoQ versus -0.2% market forecasts and 2.0% previous readings. Further, the YoY figures also eased to 2.2% compared to 3.3% expected and 6.4% previous readings.

Also read: Breaking: NZD/USD dumps on big miss in NZ GDP

On Wednesday, Bloomberg quoted Anthony Walker, a director of sovereign ratings for Australia, New Zealand and the Pacific at S&P to mention that "New Zealand’s credit grades with S&P Global Ratings could come under pressure if the nation’s current account deficit remains too big." It should be noted that the national Current Account Deficit shrank to $-9.45B in Q4, from $-10.2B in Q3. However, the Current Account – GDP Ratio slumped to -8.9% from -7.9% prior and -8.4% market forecasts.

Apart from the data at home and fears of NZ rating cut, the market’s risk-off mood previously weighed on the AUD/NZD prices, mainly due to the Australia Dollar’s (AUD) risk-barometer status. The sentiment soured as banking crisis reached Europe with a G-SIB – global systemically important bank, namely Credit Suisse (CS), struggling with its Credit Default Swaps (CDS).

That said, the Yields slumped and European stock market closed in the red but Wall Street closed mixed as Swiss National Bank (SNB) stepped forward to help CS.

Looking ahead, AUD/NZD is likely to reverse amid broad risk-off mood and challenges for the AUD. However, today’s Aussie jobs report for February and the Reserve Bank of Australia’s (RBA) fourth-quarter (Q4) Bulletin will be important for the pair traders to watch for fresh impulse