Friday has decreased on Friday and is quoted to 0.5931, 0.68% less in the day. This follows a seven -day demonstration in which NZD/USD increased a huge 7.9%.
New Zealand inflation is accelerated to 2.5%
New Zealand increased to 2.5% A/A in the first quarter of 2025, compared to 2.2% in the fourth quarter of 2024 and above the market consensus of 2.3%. This was the highest inflation rate since June 2024. Inflation was largely driven by higher gasoline and rental prices. Quarterly, increased to 0.9%, compared to 0.5%in the fourth quarter and above the estimation of the market of 0.7%.
RBNZ is expected to reduce rates
The New Zealand reservation bank will not lose much sleep due to the increase in inflation, which is still within the target of the 2%-3%reserve bank. What mainly cares RBNZ officials are commercial tensions increasing and a worsening perspective for the global economy, since the president of the United States, Trump, continues to threaten additional tariffs.
Even with the increase in inflation, monetary markets have a total price in an increase in rates at the May 28 meeting. The rates trimmed in a quarter quarter earlier this month, reducing the 3.5%cash rate, its lowest level since October 2022. The central bank is expected to remain aggressive and continue to reduce the rates to protect the New Zealand economy in the difficult economic panorama. We could see a 2.75% cash drop or even 2.5% for the fourth quarter.
Erratic tariff policy in the United States is expected to have a limited direct effect on the New Zealand economy. However, the American commercial war is a great concern, since China’s growth will decrease and this will damage New Zealand exports, since China is the largest commercial partner in New Zealand.
NZD/USD Technical
- NZD/USD has pushed under the support at 0.5922. Next, there is a support at 0.5872
- There is resistance to 0.60000 and 0.6028
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