RBNZ Core Inflation Model rises by 1.8% YoY in Q4 2020, Kiwi breaches 0.72
|The Reserve Bank of New Zealand (RBNZ) released its Sectoral Factor Model Inflation gauge for the fourth quarter of 2020 after NZ Stats released the official consumer price index (CPI) early Friday.
The gauge rose to 1.8% YoY in Q4. The inflation measures are closely watched by the RBNZ, which has a monetary policy goal of achieving 1% to 3% inflation.
About the RBNZ Sectoral Factor Model Inflation
The Reserve Bank of New Zealand has a set of models that produce core inflation estimates. The sectoral factor model estimates a measure of core inflation based on co-movements - the extent to which individual price series move together. It takes a sectoral approach , estimating core inflation based on two sets of prices: prices of tradable items, which are those either imported or exposed to international competition, and prices of non-tradable items, which are those produced domestically and not facing competition from imports.
FX Implications
The Kiwi dollar is running through fresh supply, as NZD/USD breaches the 0.7200 support. The spot drops 0.19% to trade at 0.7196, as of writing.
NZD/USD Technical levels to watch
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