NZ Inflation Data & RBNZ To Set The Course For NZD

This week will be an important milestone for the Kiwi Dollar. Two risk events are lines up that will set the tone for the NZD in the short and medium term.
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This week will be an important milestone for the Kiwi Dollar.

In the past three weeks we’ve seen the short-term bias for the NZD go from negative to positive and back to negative most recently.

The main driver of this short-term fluctuations is due to the monetary policy outlook for the RBNZ.

More specially, whether the central bank will cut interest rates or keep them on hold in this week’s upcoming policy meeting.

There is one more data point that could seal the deal for a rate cut this week. This data point is the 2-year inflation expectations for New Zealand and is due the day before the RBNZ meeting.

Westpac investment bank has noted that their expectations for this meeting is highly dependant on whether we see a recovery in 2-year inflation expectations or another miss.

In this week ahead video LINK we help you prepare for these events and also highlight a few possible scenarios for trading the NZD this week.

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Highlights of the video:

00:34 – Baseline context for the NZD

01:48 – Baseline expectations for the upcoming risk event

03:29 – Possible sentiment shifts

04:57 – Possible currency pairs to consider

05:32 – Learn more about phase one and two sentiment shifts

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