- NZD/USD falls to a two-month low of 0.6039 following the release of inflation data on Wednesday.
- New Zealand CPI rose 2.2% year-on-year in the September quarter, falling within the RBNZ’s target range of 1% to 3%.
- Atlanta Fed President Raphael Bostic anticipates only one more 25 basis point interest rate cut in 2024.
NZD/USD sees a decline for the second day in a row, trading around 0.6060 during Asian trading hours. The pair hit a two-month low of 0.6039 after the latest data showed inflation in New Zealand has slowed to its lowest level in more than three years.
In the September quarter, the New Zealand Consumer Price Index (CPI) rose 2.2% year-on-year, up from a 3.3% year-on-year increase in the previous quarter. The CPI rose 0.6% quarter-on-quarter in September, compared with a 0.4% rise in the June quarter, according to figures released by Stats NZ.
Nicola Growden, consumer prices manager at Stats NZ, said, “For the first time since March 2021, annual inflation is within the Reserve Bank of New Zealand’s (RBNZ) 1% to 3% target range. Prices continue to rise, but at a slower pace than before.”
The US Dollar (USD) is receiving support, boosted by strong jobs reports and inflation data that have reduced expectations of aggressive easing by the Federal Reserve (Fed). As a result, markets are now forecasting a total of 125 basis points in rate cuts over the next year.
According to the CME FedWatch tool, there is currently a 94.1% probability of a 25 basis point rate cut in November, with no expectation of a reduction greater than 50 basis points.
On Tuesday, Federal Reserve Bank of Atlanta President Raphael Bostic stated that he anticipates only one more 25 basis point interest rate cut this year, as reflected in his projections during last month’s central bank meeting. “The average forecast was 50 basis points additional to the 50 basis points already implemented in September, according to Reuters.
economic indicator
Consumer Price Index (YoY)
This report, published by Statistics New Zealandis a measure of the movement of inflation that is made from the comparison between retail prices in a representative consumer basket of goods and services in certain periods of time. The purchasing power of the New Zealand dollar is deteriorating due to inflation. The CPI is an indicator of inflationary pressure and can generate changes in purchasing trends. A high reading is perceived as positive for the dollar, while a reading below expectations is negative and bearish for the currency.
Last post:
Tue Oct 15, 2024 21:45
Frequency:
Quarterly
Current:
2.2%
Dear:
2.2%
Previous:
3.3%
Fountain:
Stats NZ
With the Reserve Bank of New Zealand’s (RBNZ) inflation target hovering around the 2% midpoint, Statistics New Zealand’s quarterly release of the Consumer Price Index (CPI) is of great importance. The trend in consumer prices tends to influence the RBNZ interest rate decision, which in turn, strongly impacts the valuation of the NZD. Accelerating inflation could lead to faster rate tightening by the Reserve Bank of New Zealand and vice versa. Actual numbers beating forecasts make NZD bullish.
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.
