logo |

News

    Home   >     Industry    >     Main body

    Kiwi Traders Look to Inflation Data for Negative Rates Clues

    Abstract:A string of positive New Zealand data has got investors reassessing the odds of negative interest rates. Inflation figures due this week may help to clarify the picture.

      LISTEN TO ARTICLE

      2:51

      SHARE THIS ARTICLE

      Share

      Tweet

      Post

      Email

      Photographer: Brendon O'Hagan/Bloomberg

      Photographer: Brendon O'Hagan/Bloomberg

      A string of positive New Zealand data has got investors reassessing the odds of negative interest rates. Inflation figures due this week may help to clarify the picture.

      The report may be key for the New Zealand dollar, which has been consolidating against the greenback since mid-September. Depending on the print, the kiwi could breach its 100-day moving average to drop toward 64 U.S. cents or head higher to test resistance around 68 cents.

      New Zealand‘s currency has been caught in a tug-of-war as traders try to get a handle on when and if the central bank will deploy sub-zero rates to shore up growth. While policy makers insist the tool remains an option, there’s been some skepticism that the rhetoric is merely an attempt to keep the currencys gains in check.

      {15}

      The kiwi has been confined within the 65 to 68 cent range since reaching a 17-month high of 67.98 cents on Sept. 18. It traded around 66 cents on Friday.

      {15}

      “If anything, the market is getting cold feet about rate cuts following a run of strong data, including the REINZ housing market data,” said Jason Wong, a currency strategist at Bank of New Zealand in Wellington.

      Manufacturing, retail-card spending and house sales have all improved, giving credence to the argument that the economy is regaining some momentum. That has helped drive down the probability of the official cash rate falling to -0.25% by April to 28% from 40% on Oct. 8.

      Third-quarter inflation data due Friday may give traders a better steer. Economists predict that prices climbed 1.7% on year, versus a 1.5% increase in the previous three months. A better-than-expected reading would cool easing bets and bolster the currency.

      {21}

      The Reserve Bank of New Zealand is aiming to get inflation in the middle of a 1%-3% band. In August, it forecast annual price gains would drop as low as 0.3% in late 2021.

      {21}

      With the election risk now out of the way, investors will be watching to see if the upcoming inflation print also helps to clarify the picture.

      Below are the key Asian economic data and events due this week:

    •   Monday, Oct. 19: China 3Q GDP, retail sales, industrial production and fixed assets ex-rural, Japan trade balance, Philippines BoP overall

    •   Tuesday, Oct. 20: RBA minutes and Assistant Governor Kent speaks, China 1-year and 5-year loan prime rate

    •   Wednesday, Oct. 21: New Zealand credit card spending, South Korea 20-day exports/imports and PPI, Malaysia CPI

    •   Thursday, Oct. 22: RBAs Debelle speaks, Australia 3Q business confidence, Philippine budget balance

    •   Friday, Oct. 23: New Zealand 3Q CPI, Japan CPI and PMIs, Singapore CPI

    Latest News

    New Zealand Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand

    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand
    Current Rate  :
    --
    Amount
    New Zealand Dollar
    Available
    -- United States Dollar
    Risk Warning

    The Database of WikiFX comes from the official regulatory authorities , such as the FCA, ASIC, etc. The published content is also based on fairness, objectivity and fact. WikiFX doesn't ask for PR fees, advertising fees, ranking fees, data cleaning fees and other illogical fees. WikiFX will do its utmost to maintain the consistency and synchronization of database with authoritative data sources such as regulatory authorities, but does not guarantee the data to be up to date consistently.

    Given the complexity of forex industry, some brokers are issued legal licenses by cheating regulation institutes. If the data published by WikiFX are not in accordance with the fact, please click "Complaints "and "Correction" to inform us. We will check immediately and release the results.

    Foreign exchange, precious metals and over-the-counter (OTC) contracts are leveraged products, which have high risks and may lead to losses of your investment principal. Please invest rationally.

    Special Note, the content of the Wikifx site is for information purposes only and should not be construed as investment advice. The Forex broker is chosen by the client. The client understands and takes into account all risks arising with Forex trading is not relevant with WikiFX, the client should bear full responsibility for their consequences.