- Consensus suggests markets are looking for New Zealand to have risen by 0.5% during June which, equal to the 0.5% increase seen back in May, is expected to push the annual rate of Kiwi from 1.1% up to 1.6%.
- Markets care about the data because it has a direct bearing on Reserve Bank of New Zealand interest rate policy. Changes in interest rates, or hints of them being in the cards, are only made in response to movements in but impact currencies because of the push and pull influence they have on international capital flows and their allure for short-term speculators.
- The Reserve Bank of New Zealand has held its interest rate at a record low of 1.75% ever since the end of 2016 and, back in May, warned markets that rates are likely to remain at their current levels for "a considerable period of time."
- "New Zealand’s domestic economic picture continues to deteriorate. Weak business confidence suggests the softer undertones to the Q1 GDP figures are set to continue and the RBNZ has become incrementally more dovish. These domestic clouds are likely to continue to hang over the NZD and see it trade defensively," says Daniel Been, head of FX research at Australia and New Zealand Banking Group.
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