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Q2 NZ Inflation numbers to keep the pressure on the RBNZ

Written by Sam Coxhead on July 18th, 2011.      0 comments

11:05 AM (NZT) Just released NZ Q2 Inflation numbers show a rise of 1.0% against an expectation of .8%. The NZD has rallied on the back of this as would be expected. As an annual number it has hit 5.3%, although inflated by the increase in GST.
 
As one comes to expected Fuel, food and electricity costs led the increase, along with airfares.
 
This number will keep the pressure on the RBNZ to get inflationary pressure under control. It is going to be interesting to see how the interest rate markets play out for the remainder of the week in the absence of any further economic data in NZ. The increasingly gloomy global picture creates a mixed outlook for the RBNZ, taking into account that hikes in the cash rate take 12-18 months to have an effect.
 
The NZD has softened from the highs seen just after the release, and I think this is an indicator that gains are going to be harder fought going forward for the NZ dollar, after its rampant form last week.
 
          Past 24 hours
  Current level Pre- NZ CPI  % Chge NZ CPI   Low High
NZD/USD 0.8477 0.8447 0.35%   0.8374 0.8490
AUD/USD 1.0645 1.0650 -0.05%   1.0615 1.0747
NZD/AUD 0.7965 0.7930 0.44%   0.7829 0.7972
AUD/NZD 1.2555 1.2610 -0.44%   1.2544 1.2773
NZD/GBP 0.5262 0.5242 0.38%   0.5197 0.5268
NZD/EUR 0.6005 0.5978 0.45%   0.5921 0.6008
NZD/YEN 67.06 66.85 0.31%   66.33 67.16
NZD/CAD 0.8091 0.8060 0.38%   0.8030 0.8104
 

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