NZD gains 0.52% ahead of RBNZ meeting

The central bank in New Zealand is expected to maintain interest rates at 5.50%, with the NZD/USD pair reaching 0.6127. Despite few expecting the RBNZ to lift interest rates at the meeting, some analysts see a risk of hawkish posturing.

Forecasts and commentary from Reserve Bank Governor Adrian Orr are likely to be scrutinized for cues. New Zealand data has come out below expectations, suggesting interest rates may be cut.

Official data from Statistics New Zealand showed that the Consumer Price Index (CPI) rose 5.6% in the 12 months to September, lower than expectations of 5.9% and the prior quarter’s reading of 6.0%. New Zealand’s inflation increased to 1.8% but fell short of expectations of 2.0%.

The Unemployment Rate climbed to 3.9% in the September quarter, compared with 3.6% last quarter. However, the rising jobless rate is unlikely to be a concern for the RBNZ, and some analysts believe Orr’s commentary could sway hawkish, fueling further upside for the Kiwi.

Asian markets closed with the Hang Seng almost 1.0% lower on Tuesday, reflecting a negative outlook for China, New Zealand’s main trading partner.