New Zealand’s third quarter inflation figures were almost in line with expectations: the year-on-year rate fell as expected to 2.2%, while quarterly inflation rose slightly less than expected to 0.6%. The data doesn’t really allow for a fundamental reassessment, says Michael Pfister, FX analyst at Commerzbank.
NZD/USD is well below its early October highs
“Indeed, there is still a strong argument for the Reserve Bank of New Zealand to continue to reduce the tightening of monetary policy in the upcoming meetings. After all, New Zealand’s real economy continues to falter and the sharp drop in the rate annual rate should provide the case for an additional 50 basis point cut next month.”
“The Kiwi came under pressure after the numbers were released, only to recover somewhat in early Asian trading. NZD/USD is now well below its early October highs. While the 50-point rate cut Last week’s core data may have played a role as it raised New Zealand expectations for the November meeting, continued weakness in Chinese data may also have played a role.”
“With inflation, one of New Zealand’s most important data points, already behind us, attention should return to the Chinese data. If they continue to weaken, the Kiwi’s recovery is likely to be delayed.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
