New Zealand Dollar in downtrend as negative fundamentals weigh
The New Zealand Dollar is under pressure. The latest figures from Statistics New Zealand showed the New Zealand economy contracted by 0.1% in Q4 of 2023 following a 0.3% contraction in Q3.
At the same time, headline inflation remained relatively high at 4.7% during the same reporting period, although it showed a slowdown from the 5.6% recorded in Q3.
Normally weak growth would call for lower interest rates. However, the Reserve Bank of New Zealand (RBNZ) cannot cut interest rates because of too-high inflation. Elevated price growth is partly a result of structural issues such as a tight labor market, which in turn keeps wage inflation high.
In his speech on Tuesday, Governor Orr said the RBNZ remains “laser-focused on its job to control inflation.”
“We're now in a much happier space, where most central banks feel we're back on top of inflation, [but we are] not there yet,” he added.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.