NZD: Signs of a resurgence in inflation – Commerzbank
Prices are rising faster again in New Zealand, Commerzbank's FX analyst Volkmar Baur notes.
Market prices in almost three further interest rate cuts
"According to monthly price data, which only covers part of the CPI basket but is a reliable indicator, prices rose significantly faster again in June. The full inflation data for the second quarter will not be published until Monday."
"However, if the trend is confirmed, this could reinforce the impression that the central bank may have reached the end of its interest rate cycle, even though it struck a very dovish tone following its meeting last week."
"The market continues to price in almost three further interest rate cuts by the middle of next year. However, I would be much more cautious and continue to expect only one further cut at most. But the NZD is likely to benefit little from this tighter monetary policy, as economic momentum remains weak."
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FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
