NZD/USD to move higher even in the case of an RBNZ dovish shift – ING
Original Zealand’s Client Tag Index (CPI) eased further in the fourth quarter of 2023. NZD/USD broke inspire above 0.6100 on the initiating. Economists at ING analyze the pair’s outlook.
Non-tradeable inflation presents RBNZ a hawkish “loophole”
Original Zealand’s inflation matched estimates at 0.5% quarter-on-quarter and 4.7% YoY in the 4Q print. Nevertheless, non-tradeable CPI did come in hotter than expected at 1.1% QoQ, which has ended in a switch better in non everlasting NZD rates.
The stronger non-tradeable CPI might perhaps perchance well presumably offer an excuse for the RBNZ to stick with a couple hawkish memoir on 28 February, even supposing they are going to must admit that traditional inflation pressures have declined and the economy underperformed, making any promise of better-for-longer a extra tough sell to markets.
The following key initiating in Original Zealand is the 4Q jobs characterize on 6 February. Till then, question volatile Chinese sentiment and USD dynamics to force NZD performance.
Even in the case of an RBNZ dovish shift, we love the potentialities of the next NZD/USD beyond the brief term because the Kiwi benefits from a broader USD decline and Fed price cuts. Our 365 days-break purpose is 0.6400.
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