NEW ZEALAND DOLLAR WEAKENS AGAINST US DOLLAR AFTER US CPI BEATS ESTIMATES
- New Zealand Dollar weakens against the US Dollar following the latest US inflation figures for February.
- They paint a picture of stubbornly hot inflation, which could make the Fed keep interest rates elevated to cool.
- The NZD/USD pair is falling back down towards its range lows in the 0.6080s.
The New Zealand Dollar trades lower against the US Dollar on Tuesday after the release of US Consumer Price Index (CPI) data for February shows inflationary pressures in the American economy remain stubbornly high.
The data suggests the Federal Reserve (Fed) may have to keep interest rates higher for longer to cool the economy. Relatively higher interest rates for longer is a positive driver for the US Dollar as it attracts more foreign capital inflows.
The fact that Gasoline and Energy prices were two of the biggest contributors to elevated inflation, however, will probably limit US Dollar upside since these are seen as less entrenched pressures and subject to global commodity price fluctuations.
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