16 Oct 2013
Rising inflation boosts chances of Kiwi rate hike
FXstreet.com (London) - Rising New Zealand inflation numbers have helped drive the Kiwi dollar onto a one-month high on expectations of a further rate hike.
Consumer Price Index-based inflation (CPI) numbers rose by 0.9 percent quarter-on-quarter, the biggest jump since the second quarter, 2011. Inflation doubled from 0.7 percent in the second quarter to 1.4 percent year-on-year. Quarterly inflation pressure was helped by food and fuel prices, however NZD strength is helping to hold down imported goods prices.
House prices continue to climb, up 3.2 percent year-on-year.
The Reserve Bank of New Zealand is perhaps the most hawkish of the major central banks, with sights firmly fixed on a schedule of monetary tightening.
Two-year interest rate swaps climbed to 2011 highs, up 6bp. Reserve Bank of New Zealand statements have made a rate hike this year unlikely, however markets are pricing in a hike from the 2.5 percent cash rate by June 2014.
NZD/USD has climbed 0.47 percent on the data to USD0.8419, helped by demand for higher-yielding currencies.
The New Zealand dollar climbed 0.5 percent against the Aussie dollar to AUD0.8836.
Consumer Price Index-based inflation (CPI) numbers rose by 0.9 percent quarter-on-quarter, the biggest jump since the second quarter, 2011. Inflation doubled from 0.7 percent in the second quarter to 1.4 percent year-on-year. Quarterly inflation pressure was helped by food and fuel prices, however NZD strength is helping to hold down imported goods prices.
House prices continue to climb, up 3.2 percent year-on-year.
The Reserve Bank of New Zealand is perhaps the most hawkish of the major central banks, with sights firmly fixed on a schedule of monetary tightening.
Two-year interest rate swaps climbed to 2011 highs, up 6bp. Reserve Bank of New Zealand statements have made a rate hike this year unlikely, however markets are pricing in a hike from the 2.5 percent cash rate by June 2014.
NZD/USD has climbed 0.47 percent on the data to USD0.8419, helped by demand for higher-yielding currencies.
The New Zealand dollar climbed 0.5 percent against the Aussie dollar to AUD0.8836.