We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 1.60% Oil - US Crude: 0.79% Gold: 0.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/f6xT4Uo2tO
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.20% 🇦🇺AUD: 0.13% 🇬🇧GBP: 0.08% 🇨🇭CHF: -0.03% 🇨🇦CAD: -0.05% 🇯🇵JPY: -0.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/co2JkXN1A9
  • LIVE NOW: Join DailyFX Senior Strategist @IlyaSpivak LIVE as he discusses the outlook for the financial markets in the week ahead! https://www.dailyfx.com/webinars/889679267?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.08%, while traders in France 40 are at opposite extremes with 89.09%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/spZkZaPsuM
  • AUD/USD Technical Analysis: September Floor Back Under Fire - https://www.dailyfx.com/forex/technical/home/analysis/aud-usd/2019/09/23/AUDUSD-Technical-Analysis-September-Floor-Back-Under-Fire.html?utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #AUDUSD #technicalanalysis
  • LIVE IN 30 MIN: Join DailyFX Senior Strategist @IlyaSpivak LIVE as he discusses the outlook for the financial markets in the week ahead! https://www.dailyfx.com/webinars/889679267?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • $AUD watchers should keep a close eye on iron ore prices. They fell sharply last month, albeit from very high levels. Get your market update from @DavidCottleFX here: https://t.co/pEY7SReQ7R https://t.co/da6P4i4qBL
  • Tune in to @IlyaSpivak 's #webinar at 10:00 PM ET/2:00 AM GMT for insight on the cross market weekly outlook. Register here: https://t.co/E213bTtq5C https://t.co/QEgLPbz9Xp
  • RT @KyleR_IG: #ASX jumps half-a-per-cent this morning, as China's Vice Agriculture Minister states that last week's cancelled visit by a Ch…
  • #EURJPY pivot points (daily) – S3: 116.5, S2: 117.87, S1: 118.21, R1: 119.13, R2: 119.72, R3: 120.64 - https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
NZD/USD Risks Fresh Record-Highs Ahead of RBNZ on Faster Inflation

NZD/USD Risks Fresh Record-Highs Ahead of RBNZ on Faster Inflation

2014-07-11 00:30:00
David Song, Currency Strategist
Share:
NZD/USD Risks Fresh Record-Highs Ahead of RBNZ on Faster Inflation

Fundamental Forecast for Pound:Bullish

The NZD/USD remains at risk of marking fresh record-highs ahead of the next Reserve Bank of New Zealand (RBNZ) policy meeting on July 23 as the economic docket is expected to show heightening price pressures across the region.

Indeed, the headline reading for New Zealand inflation is expected to increase an annualized 1.8% in the second-quarter, which would mark the fastest pace of growth since the last three-months of 2011, and heightening price pressures may generate a further advance in the exchange rate as it fuels interest rate expectations. According to Credit Suisse overnight index swaps, market participants are pricing a 90% chance for another 25bp rate hike in July, but we may see the RBNZ take a more aggressive approach in normalizing monetary policy as the stronger recovery raises the risk for inflation.

RBNZ Assistant Governor John McDermott warned that the central bank will aim for ‘low and stable inflation’ as the central bank raises its outlook for growth, and the stronger recovery should continue to heighten the appeal of the New Zealand dollar, especially as Fitch Ratings raising its credit rating outlook for the region. With that said, the positive developments coming out of the region may continue to limit the downside risk for the NZD/USD, and we may see the RBNZ do little to halt the advance in the local currency as it helps the central bank to achieve price stability.

As a result, we will retain a bullish outlook for the NZD/USD as it approaches the 2011 high (0.8841), and we will continue to look for opportunities to ‘buy dips’ ahead of the RBNZ interest rate decision should the inflation report further boost interest rate expectations.

provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.