New Zealand dollar weakens after US CPI rises to 3.8% YoY, overshooting forecasts ahead of RBNZ inflation expectations data.
The New Zealand dollar dipped against the USD on Tuesday, erasing earlier gains after US inflation data exceeded expectations. NZD/USD fell to a session low near 0.5935 before partially recovering, reflecting market indecision amid volatile trade.
US headline CPI accelerated to 3.8% YoY in April, the highest since May 2023, with core CPI at 2.8% YoY. Energy prices surged 17.9% YoY, driven by Middle East tensions disrupting oil supplies. Meanwhile, New Zealand’s Q1 CPI remained above the RBNZ’s 1-3% target at 3.1% YoY.
Attention now turns to Wednesday’s RBNZ Q2 inflation expectations survey, following last quarter’s readings of 2.37% for two-year and 2.59% for one-year expectations. Thursday’s BusinessNZ manufacturing index will provide further domestic insight.