December 9, 2022

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Hot New Zealand inflation boosts RBNZ rate hike expectations and the NZD

2 min read

Forex news for Asia trading on
Friday
16
July 2021

Once
again eyes turned to New Zealand, today for the release of Q2
inflation data. The headline CPI came in hot, at 3.3% y/y and 1.3%
for the quarter alone. Expectations and market pricing for a
near-term cash rate hike from the Reserve Bank of New Zealand rose; while last week the consensus shifted to a hike in November this year
this week it has moved to the next meeting, on 18 August. The data
today further cemented this view. As an aside, ahead of the
mid-August meeting there is official employment data due from NZ on August 4.

NZD/USD
was marked higher immediately and
has tracked pretty much 0.6990-0.7020 in the hours following the data
release. Check
out the bullets above for some of the very aggressive rate hike calls
from ANZ and Westpac.

AUD/USD
failed to follow along with the kiwi, AUD/NZD sliding further.

USD/JPY
has been a bit
of a mover,
trading from lows under 109.80 to above 110. As
I post we have had the, as expected, BOJ policy statement and downgrade
for economic growth,
and
an outline of the Bank’s climate program:

  • main
    policy planks are all unchanged
  • the
    near term GDP growth projection has been cut but further out
    maintained, in line with the Bank’s expected slow recovery for the
    economy
  • lending
    for climate-change addressing reasons to
    be set at 0% for a period of one-year with no limit on the number of
    rollovers

USD/JPY
is barely changed in the wake of the meeting’s results. 

Australian dollar against the New Zealand dollar this week. Sad. 

aud/nzd chart rbnz rate hikes




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