The New Zealand dollar surged today as the latest inflation report beat expectations.
New Zealand’s annual CPI is 7.2% in the third quarter. Although this decreased slightly, 7.3% The market consensus last quarter was 6.6% It was hotter than expected! 🔥
With such a high inflation rate, New Zealand’s inflation rate is 32-year high When The Reserve Bank of New Zealand (RBNZ) is likely to hike rates even more aggressively this year.
In the aftermath of the COVID-19 outbreak, the RBNZ was one of the first major central banks to begin tightening monetary policy.
Since October last year, the RBNZ has 3.25% It continues to suggest further cash rate hikes until inflation is contained.
that’s probably the only thing Adrian Orrthe current governor of the RBNZ believes…
Market participants now expect the RBNZ to slow down as data shows inflation has not slowed as expected. move more quickly regain control of pricesthe cash rate to 0.75% (75 bps) next month.
Then interest rates will rise Four% In 12 months, this is the national Biggest rise ever!
The New Zealand dollar rose against all major currencies today as hawkish monetary policy normally supports the currency.
For example, this is NZD to CAD today.
Not familiar with interest rates and their effect on currencies? Read our lesson and Why Interest Rates Matter For Forex Traders.
Let’s see what else happened in the FX market today…
currency market movers
Which currency pair gained the most today?
as shown by us FX Market Mover page, New Zealand Dollar/Canadian Dollar the leader of the herd, 1.14% Also 88 pips. 🏆
Which currency pair lost the most today?
British Pound/New Zealand Dollar was the biggest loser 1.33% Also 269 Pips!😢
In contrast to yesterday when the British pound rose after the new Finance Minister decided to scrap most of the government’s ‘mini-budget’…
Today was the opposite!
After spending another day digesting this news, market participants realized that this was in fact Bank of England not raising interest rates as aggressively as previously expected Decided to dump the pound and finished lower than yesterday.
currency strength
What is the overall strength or weakness of each major currency today?
based on currency strength meter With MarketMilk™, New Zealand dollar It was the strongest currency. 💪
of GBP It was the weakest currency.
See how the NZD strengthened against all major currencies.
short-term currency trends
when it comes to Short-term trend strengththe New Zealand dollar is currently showing bullish strength. british pound (GBP) and Euro (Euro).
of JPY (JPY) continues to show the most bearish strength.
AUD, CAD and CHF are also bearish but weakening.
currency volatility
Which currency was the most volatile today?
based on us currency volatility meter,that is New Zealand Dollar (NZD).
Which currency pair had the most volatility today?
Given that NZD is the most volatile currency, it has to be the NZD pair. But which one?
British Pound/New Zealand Dollar. moved 1.86% Also 368 pips!
