Connect with us

Economics

USD/NZD higher ahead of retail sales

The New Zealand dollar continues to gain ground this week. In the North American session, NZD/USD is trading at 0.6267, up 0.35%. New Zealand will release…

Share this article:

Published

on

This article was originally published by Market Pulse

The New Zealand dollar continues to gain ground this week. In the North American session, NZD/USD is trading at 0.6267, up 0.35%.

New Zealand will release retail sales for Q3 later in the day. The markets are expecting a small gain of 0.5%, which would be a turnaround from a disappointing -2.2% in Q2. Consumers continue to struggle with high inflation and rising interest rates, and after back-to-back declines, a gain in retail sales would be welcome news.

RBNZ delivers record hike

The Reserve Bank of New Zealand delivered a huge 75-bp hike on Wednesday, which raised the cash rate to 4.25%. The move had been priced in by the markets, but the New Zealand dollar jumped 1.5%, thanks to the oversize move and a broadly-lower US dollar. The cash rate is the highest among major central banks, but there’s more to come. The RBNZ has projected a terminal rate of 5.5% in 2023, which means more rate hikes in 2023. Inflation has been stickier than the RBNZ anticipated, and the bank’s Monetary Policy Statement was decidedly hawkish, noting that “core consumer price inflation is too high” and “near-term inflation expectations have risen.”

The statement said that inflation is expected to accelerate to 7.5% in Q4 and would not fall to the midpoint of the 1%-3% target until 2025. The RBNZ is ready for a long fight with inflation, but it remains to be seen if the bank can guide the economy to a soft landing.

The Fed minutes reiterated that lower rates are on the way, which we’ve been hearing from a stream of Federal members over the past two weeks. The minutes were vague as far as a timeline, noting that smaller rate increases would happen “soon”, as the Fed continues to evaluate the impact of the current policy on the economy. Members also voiced concern that inflation was yet to show any signs of peaking. Still, the markets viewed the minutes as dovish, which is weighing on the US dollar today.

.

NZD/USD Technical

  • NZD/USD is testing resistance at 0.6283. Above, there is resistance at 0.6361
  • There is support at 0.6217 and 0.6139

dollar
inflation
monetary
markets
reserve
policy
interest rates
fed
us dollar
monetary policy

Share this article:

Economics

Maxine Waters Confirms Bankman-Fried Will Testify Virtually Next Week… Alongside Current FTX CEO

Maxine Waters Confirms Bankman-Fried Will Testify Virtually Next Week… Alongside Current FTX CEO

Update (1830ET): The House Financial Services…

Share this article:

Continue Reading
Economics

5 Principles Of Stagflation

5 Principles Of Stagflation

Authored by Jeffrey Tucker via The Epoch Times,

Stagflation is the combination of slow or falling economic output…

Share this article:

Continue Reading
Economics

Week Ahead – Blockbuster end to the year

US Two blockbuster events will have Wall Street on edge as the disinflation trade may have gotten ahead of itself. The last major piece of economic news…

Share this article:

Continue Reading

Trending