- NZD/USD falls to a two-month low of 0.6039 following the inflation data release on Wednesday.
- New Zealand's CPI rose 2.2% YoY in the September quarter, falling within the RBNZ target range of 1% to 3%.
- Atlanta Fed President Raphael Bostic anticipates just one more interest rate cut of 25 basis points in 2024.
NZD/USD experiences a decline for the third consecutive day, trading around 0.6060 during Asian trading hours. The pair hit a two-month low of 0.6039 after the latest data showed that inflation in New Zealand has slowed to its lowest level in over three years.
In the September quarter, New Zealand's Consumer Price Index (CPI) rose 2.2% year-over-year, down from a 3.3% annual increase in the previous quarter. The CPI increased by 0.6% quarter-over-quarter in September, compared to a 0.4% rise in the June quarter, according to figures released by Stats NZ.
Nicola Growden, the consumer prices manager at Stats NZ, noted, “For the first time since March 2021, annual inflation is within the Reserve Bank of New Zealand’s (RBNZ) target range of 1% to 3%. Prices are still increasing but at a slower rate than before.”
The US Dollar (USD) receives support, bolstered by strong jobs reports and inflation data that have reduced expectations for 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 larger 50-basis-point reduction.
On Tuesday, Federal Reserve Bank of Atlanta President Raphael Bostic stated that he anticipates just one more interest rate cut of 25 basis points this year, as reflected in his projections during last month's US central bank meeting. "The median forecast was for 50 basis points beyond the 50 basis points already implemented in September, according to Reuters.
Economic Indicator
Consumer Price Index (YoY)
The Consumer Price Index (CPI), released by Statistics New Zealand on a quarterly basis, measures changes in the price of goods and services bought by New Zealand households.The CPI is a key indicator to measure inflation and changes in purchasing trends. The YoY reading compares prices in the reference quarter to the same quarter a year earlier. A high reading is seen as bullish for the New Zealand Dollar (NZD), while a low reading is seen as bearish.
Read more.Last release: Tue Oct 15, 2024 21:45
Frequency: Quarterly
Actual: 2.2%
Consensus: 2.2%
Previous: 3.3%
Source: Stats NZ
With the Reserve Bank of New Zealand's (RBNZ) inflation target being around the midpoint of 2%, Statistics New Zealand’s quarterly Consumer Price Index (CPI) publication is of high significance. The trend in consumer prices tends to influence RBNZ’s interest rates decision, which in turn, heavily impacts the NZD valuation. Acceleration in inflation could lead to faster tightening of the rates by the RBNZ and vice-versa. Actual figures beating forecasts render NZD bullish.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD remains offered in the low-1.0900s
The generalised selling pressure continues to weigh on the risk complex, pushing EUR/USD back toward the 1.0900 support level amid a growing risk-off mood, as traders assess President Trump’s reciprocal tariffs and their impact on economic activity.
GBP/USD retreats further and breaks below 1.2800
The US Dollar is picking up extra pace and flirting with daily highs, sending GBP/USD to multi-week lows near 1.2770 in a context where safe-haven demand continues to dictate sentiment amid the chaos of US tariffs.
Gold slips back below the $3,000 mark
Gold has turned lower, slipping beneath the key $3,000 mark per troy ounce amid a broad sell-off across global equity markets. The decline in the precious metal may reflect investors unwinding long positions in gold to offset mounting losses in stocks.
US stock market suddenly reverses higher after rumor of 90-day tariff pause before sinking again Premium
NASDAQ sinks 4% before shooting higher on tariff pause rumor. CNBC says White House unaware of tariff pause rumor. S&P 500 sinks to January 2024 level. Bank of America cuts its year-end target for S&P 500 by 16%.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.