NZD/USD spiked higher on the back of today’s strong CPI inflation release to test the 200 day-average at 0.7102 before pulling back. Accordingly, economists at Rabobank have upgraded their NZD/USD one-month forecast to 0.70 from 0.69.
NZ CPI inflation a lot higher than predicted
“This morning’s release of New Zealand Q3 CPI inflation data at a much faster than expected 4.9% YoY has been the trigger for the latest spate of fears around RBNZ policy. The market is assuming that a 25 bps rate hike at the November 24 policy meeting is a done deal. This implies that the key element for markets in the coming weeks surrounds the risk of a larger move.”
“On the assumption that the RBA maintains more dovish credentials we expect AUD/NZD to continue moving back towards its recent lows around the 1.03 area.”
“We have raised our one-month NZD/USD forecast to 0.70 from 0.69.”
