New Zealand Q2 CPI eases to 1.1% QoQ, NZD/USD marches to 0.6300

The quarterly print of New Zealand’s (NZ) headline inflation, per the Consumer Price Index (CPI), released by the Statistics New Zealand, is out for the second quarter (Q2) of 2023 and is as follows:

• New Zealand Q2 CPI 1.2% QoQ versus the expected 1.0% and 1.2% prior.
• NZ CPI eases to 6.0% YoY compared to 5.9% market forecasts and 6.7% YoY prior.

Apart from the NZ CPI data, Statistics New Zealand also mentioned that the main drivers of the annual inflation were food and housing prices. “Non-tradeable inflation slowed to 6.6% on year, off a 20-year high of 6.8%,” added the official update.

NZD/USD picks up bids

Following the better-than-forecast inflation data from New Zealand, the NZD/USD pair renews intraday high near the 0.6315 round figure while extending the previous day’s corrective bounce off a one-week low, as well as snap three-day downtrend. It should be noted, however, that the NZ CPI actually eased and hence defends the Reserve Bank of New Zealand’s (RBNZ) latest status quo, which in turn prods the Kiwi pair buyers after an initial jump.

Ahead of the data, analysts at the ANZ said, “There’s likely to be some good news in the Q2 CPI report. Inflation seems to be well and truly on its way down, however it’s by no means ‘job done’ for the RBNZ.”

Also read: NZD/USD Price Analysis: Bears bail out ahead of CPI

About NZ CPI

With the Reserve Bank of New Zealand’s (RBNZ) inflation target being around the midpoint of 2%, Statistics New Zealand’s quarterly Consumer Price Index (CPI) publication is of high significance. The trend in consumer prices tends to influence RBNZ’s interest rates decision, which in turn, heavily impacts the NZD valuation. Acceleration in inflation could lead to faster tightening of the rates by the RBNZ and vice-versa. Actual figures beating forecasts render NZD bullish.