NZ Inflation rose slightly more than was expected in the last quarter of 2022- 1.4% vs expectation of 1.3%, taking the year to date in December to 7.2%. Stubborn CPI will mean the RBNZ should hike their cash rate 50 points in the February meeting taking it to 4.95% the highest since December 2008. The New Zealand Dollar (NZD) was moderately higher on the news reaching 0.6525 as it targeted the June 2022 high of 0.6540. Friday’s key US PCE Price index data a good measure of inflation should cement what the Fed do next, possibly confirming the threat that inflation is easing. Will we see the Fed push back on their predicted 50-point rise – this is clearly the biggest event risk on the calendar next week. A retest of 0.6600 is probable.
The current interbank midrate is: NZDUSD 0.6477
The interbank range this week has been: NZDUSD 0.6435- 0.6524