New Zealand Dollar Falls Sharply as Inflation Numbers Disappoint
- New Zealand 2Q CPI in at 1.6% vs. 1.8% Expected, 1.5% in 1Q
- NZ Dollar Drops After Inflation Data Falls Short of Expectations
- New Zealand Bond Yield Drop Hints at Fading RBNZ Outlook
The New Zealand Dollar fell sharply today as the nation reported its inflation figures for the month of June. The year-on-year CPI reading for the second quarter printed at 1.6 percent against market expectations of 1.8 percent and a prior figure of 1.5 percent. The quarter-on-quarter figure also fell short of forecasts calling for a 0.4 percent increase, coming in at 0.3 percent.
The Kiwi’s decline after the data release probably reflected the implication of lower-than-expected inflation numbers on RBNZ monetary policy expectations. Indeed, the slide in NZDUSD paced a parallel drop in New Zealand’s benchmark 10-year bond yield, hinting traders scaled back rate hike bets following the CPI release.
NZDUSD [15 mins – 07/15/2014] Created using FXCM Marketscope.
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