New Zealand Dollar Falls as Inflation Rate Shrinks in Q4

Forex traders sold the New Zealand dollar as the fourth-quarter Consumer Price Index issued the first negative reading in two years, shrinking -0.5% to bring annual inflation to 3.4%, the lowest since March 2008. The Kiwi dropped close to 60 pips against the US Dollar in the 15 minutes immediately following the CPI announcement. The result boosted expectations that the Reserve Bank of New Zealand would continue to cut interest rates despite a notable shift toward neutral in the commentary that accompanied the last policy announcement. The RBNZ has trimmed 3.25% off borrowing costs to date, with traders pricing in another 175-200 basis points in easing over the next 12 months.

DailyFX

Disclaimer

Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.