New Zealand Dollar Trades at 3-Week High
The New Zealand dollar hovered around $0.565 on Monday, its highest level in three weeks, as investors looked ahead to this week’s third-quarter inflation report for further clues on the Reserve Bank’s policy outlook. Data released today showed the services sector expanded for a fourth consecutive month in September, albeit modestly, while the trade deficit widened more than expected in August, pointing to a mixed economic picture. Markets are largely pricing in a third consecutive rate hike later this month, which would lift the policy rate to 3%. Last week, RBNZ Chief Economist Paul Conway said the late-October decision remained open, adding that the central bank still viewed a higher official cash rate as the most likely next move, but had not decided on the timing. The inflation report will therefore be crucial in assessing whether further tightening is warranted.
The New Zealand dollar hovered around $0.565 on Monday, its highest level in three weeks, as investors looked ahead to this week’s third-quarter inflation report for further clues on the Reserve Bank’s policy outlook. Data released today showed the services sector expanded for a fourth consecutive month in September, albeit modestly, while the trade deficit widened more than expected in August, pointing to a mixed economic picture. Markets are largely pricing in a third consecutive rate hike later this month, which would lift the policy rate to 3%.
Last week, RBNZ Chief Economist Paul Conway said the late-October decision remained open, adding that the central bank still viewed a higher official cash rate as the most likely next move, but had not decided on the timing. The inflation report will therefore be crucial in assessing whether further tightening is warranted.