The New Zealand dollar has edged lower on Monday. NZD/USD is down 0.17% on the day, trading at 0.6009 in the European session at the time of writing.

NZ inflation expectations ease to 2.3%

New Zealand’s inflation expectations fell to 2.3% in the second quarter, its lowest point since Q3 2021. This marked a third straight deceleration and the New Zealand dollar responded with modest losses. The steady drop in inflation expectations is an encouraging sign for the Reserve Bank of New Zealand but won’t translate into a rate cut in the near-term.

The New Zealand economy is sputtering and inflation fell to 4% in the first quarter, down from 4.7% in the fourth-quarter of 2023. Inflation is expected to continue falling but it has been stickier than expected and remains above the upper range of the 1-3% target band.

The central bank has shown its willingness to continue a “higher for longer stance” and has maintained the cash rate at 5.25% for six successive times. RBNZ policy makers are reluctant to start lowering rates until there is evidence that inflation will remain sustainable around 2% and that goal may not be achieved until 2025. The money markets expect the RBNZ to start cutting in the fourth quarter. The RBNZ meets next on May 22nd.

Last week, The Organization for Economic Cooperation and Development (OECD) stated that New Zealand’s inflation is “likely to be persistent” and urged the RBNZ not to lower rates until there was “clear evidence that inflation will fall to the middle of the RBNZ’s target range”. The OECD report noted that it was “uncertain” when inflation would fall to the RBNZ’s target range and there was a risk of “further negative global shocks”.

NZD/USD technical

  • NZD/USD is testing support at 0.6014. Below, there is support at 0.5987.

  • 0.6046 and 0.6073 are the next resistance lines.

NZDUSD

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD consolidates near 0.6650 ahead of US data, Fedspeak

AUD/USD consolidates near 0.6650 ahead of US data, Fedspeak

AUD/USD is consolidating the previous rebound near 0.6650 in Tuesday's European morning. The pair fails to capitalize on improved Australian sentiment data and a risk-on mood, as the focus shifts to the US data and Fedspeak for fresh trading impetus. 

AUD/USD News

USD/JPY remains offered near 159.50 amid Japanese verbal intervention

USD/JPY remains offered near 159.50 amid Japanese verbal intervention

USD/JPY stays pressured near 159.50 early Tuesday, as the Japanese Yen benefited from the verbal intervention. Japan's Hayashi said he will closely monitor the FX moves and take necessary steps. Meanwhile, the US Dollar licks its wounds ahead of sentiment data. 

USD/JPY News

Gold price retreats from two-week highs amid cautious Fed rhetoric

Gold price retreats from two-week highs amid cautious Fed rhetoric

Gold price trades in negative territory on Tuesday despite the weaker Greenback. The stronger-than-expected US Purchasing Managers Index released last week triggered Federal Reserve officials to push out the timing of the first interest rate cut this year, which continues to cap the gold’s upside.

Gold News

Bitcoin may be set for a price rebound amid alleged Trump's plan to speak at Bitcoin convention

Bitcoin may be set for a price rebound amid alleged Trump's plan to speak at Bitcoin convention

Bitcoin's price dropped below the $60K level briefly on Monday following news of defunct exchange Mt Gox beginning to pay its creditors in July. However, Santiment data reveals that the recent spike in social volume of the phrase "bottom" could signal a potential price rebound.

Read more

Trading the week ahead

Trading the week ahead

Starting Tuesday, we're watching the Canadian CPI print closely. The Bank of Canada's recent minutes suggested hesitation about the last rate cut, hinting they might delay further cuts. This makes the upcoming inflation data crucial.

Read more

Majors

Cryptocurrencies

Signatures