New Zealand inflation looks set to lift - ANZ

Ross J Burland FXStreet

Analysts at ANZ Bank New Zealand Limited (ANZ) noted that the growth outlook has softened recently, but inflation looks set to lift, boosted by a range of cost-push factors.

Key Quotes:

"This makes the outlook for monetary policy a bit more complicated at present, and focusing primarily on CPI inflation in this environment runs the risk of missing important nuances about the policy response."

"We expect that the RBNZ will be concerned with the underlying trend in inflation and its persistence over the medium term. This means that the RBNZ will be willing to “look through” higher CPI inflation to the extent that it is not expected to be permanent."

"Our expectation is that core inflation will increase towards the 2% target midpoint only gradually and that we will see limited impacts on medium-term inflation expectations as inflation pressures broaden. If inflation evolves as we expect, the OCR will eventually need to rise – but not any time soon. We continue to pencil in late-2019 for a hike, but a lot could happen between now and then."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD remains offered below 1.1600, seems vulnerable near multi-month low

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1530 region, or the lowest level since November 2025, and lower for the third consecutive day on Wednesday. Spot prices slide back below the 1.1600 mark during the Asian session and seem vulnerable to slide further.

GBP/USD slips below key averages as geopolitical risks mount

GBP/USD fell about 0.35% on Tuesday, settling around 1.3350 after slipping below the 200-day Exponential Moving Average for the first time since early December. The pair has pulled back sharply from its late-January high near 1.3870, shedding over 500 pips in a series of lower highs and lower lows.

Gold bounces back toward $5.200 amid sustained safe-haven flows

Gold bounces back toward $5,200 in Wednesday's Asian session, moving away from an over one-week low. Sustained safe-haven flows, amid escalating geopolitical tensions in the Middle East, act as a tailwind for the bullion. However, a bullish US Dollar and reduced bets for more aggressive easing by the US Fed might keep a lid on the non-yielding yellow metal ahead of the US ADP report and ISM Services PMI data due later in the day.