New Zealand Dollar Holds Gains Despite Mixed PPI Data
- New Zealand Dollar little-changed following mixed producer prices data
- Input costs rose by 1.4%, the strongest quarterly increase since Q4 2016
- Output costs rose by 1.3%, marking the third consecutive quarterly drop
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The New Zealand Dollar held on to gains scored in the wake of minutes from July’s FOMC meeting after the release of quarterly PPI data.Wholesale input costs rose 1.4 percent in the second quarter compared a 0.8 percent increase in the prior reporting period. This was the strongest increase since the third quarter of 2016.
Output cost figures showed baseline wholesale inflation slowed however, posting a gain of 1.3 percent versus a 1.4 percent increase in the first three months of 2017. This marks the third consecutive decline, mirroring more closely-watched CPI statistics.
Last week’s RBNZ policy announcement laid bare a policymakers’ need for a weaker New Zealand Dollar, whose recent appreciation was expected to have a negative impact on inflation. Officials noted that they have seen some easing in headline inflation and expect the prices for tradables to remain weak.