Same same but different. The New Zealand Dollar (NZD) has plunged to a fresh lows this morning reaching 0.6213 against the US Dollar (USD) as market sentiment remains poor and equity markets under pressure. There has been a lot of fallout since the Fed raised rates 50 points last week. US Inflation is still running hot despite coming in at a lower level of 8.3% in April, this was higher than the predicted 8.1% but down from 8.5% the 41 year high in March. Energy prices rose 31% vs 32% in March and fuel oil increased a whopping 81% vs 70%. Food prices jumped 9.4% the biggest rise since 1981. NZ Inflation expectations yesterday showed no reprieve for lower Inflation over the next while according to RBNZ predictions. The 2 years expectation at 3.29% held most of the focus as it’s the likely timeframe for when the central bank expects monetary policy tightening to have peaked. The one-year forecast came in at 4.88%. The RBNZ said inflation expectations remain anchored around the targeted range between 2-3%, in other words “move on-nothing to see here”. It’s hard to see the kiwi perk up in the near term with everything going on, downside risks remain.
The current interbank midrate is: NZDUSD 0.6248
The interbank range this week has been: NZDUSD 0.6204- 0.6412