Markets
New Zealand’s Kiwi Surges as Rate Cut Bets Pared After CPI Data
- New Zealand’s Kiwi Surges as Rate Cut Bets Pared After CPI Data
New Zealand’s dollar surged the most in a week after data showed inflation last quarter was stronger than economists had forecast.
The kiwi climbed against all its Group-of-10 peers after a government report Tuesday showed consumer prices rose 0.2 percent from the previous quarter, compared with the median estimate for no change. The currency rose as much as 0.7 percent to 71.81 U.S. cents. It bought 71.71 cents as of 11:04 a.m. in Wellington.
“Overall the third-quarter New Zealand inflation report reduces odds of more RBNZ rate cuts beyond November which will support kiwi in the near term,” Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney said. “A 25 basis point in November is virtually fully priced in our base case scenario.”
Futures were pricing in a 80 percent chance of a rate reduction in November down from 84 percent Monday.