The Reserve Bank of New Zealand (RBNZ) decided to leave their cash rate unchanged at 5.5% as widely predicted for the 8th straight meeting. It was the less than hawkish tone by Governor Orr which sent the kiwi reeling against the US Dollar (USD) falling from 0.6125 to 0.6065 post the release Wednesday. US CPI overnight declined to 3.0% for June y/y from 3.3% coming in below expectations of 3.1%. Fed’s Powell quick to reiterate the job is not done yet with managing inflation with more work to do to combat future stubborn inflation saying he would like to see the number below 2.0% before rate cuts are applied. We see a potential cut in September which could put pressure on the greenback. Next week’s key data comes in the form of NZ CPI for the second quarter expected to print at 3.6% down from 4.0%.
The current interbank midrate is: NZDUSD 0.6086
The interbank range this week has been: NZDUSD 0.6064- 0.6251