New Zealand dollar trades around 59 US cents

Daily Currency Update

The Kiwi dollar is slightly weaker this morning when valued against the Greenback. The NZD/USD pair continued its bearish spell last week as fears of a slowdown in China rose after a poor inflation report. The Kiwi dollar has dropped to near 0.5900 as the appeal for the US Dollar improved after a stubborn United States inflation report and persistent deflation risks in China. The National Bureau of Statistics of China reported that inflation remained stagnant in September while investors forecasted acceleration to 0.2% from the former reading of 0.1%. The monthly inflation data expanded at a slower pace of 0.2% from the consensus and an August reading of 0.3%. Local data on Friday saw the release of Business NZ Purchasing Manager's Index (PMI) which showed a further decline in the confidence metric, down to 45.3 against the previous print of 46.1. Kiwi traders will now have their eyes turned to New Zealand Consumer Price Index (CPI) inflation figures on Monday. NZ CPI inflation is forecast to twist, with the quarter-on-quarter figure forecast to step up from 1.1% to 2%, while the annualized figure into the third quarter is expected to tick downwards slightly from a flat 6% to 5.9%. The Reserve Bank of New Zealand (RBNZ) is currently stuck in a wait-and-see holding pattern on interest rates, and both investors and the RBNZ will be keeping a close eye on inflation.
Over the weekend New Zealand Prime Minister Chris Hipkins has conceded his Labour party lost Saturday’s election, as voters punished the government and took the country rightwards nine months after his predecessor Jacinda Ardern suddenly resigned. With more than 98% of votes counted, the center-right National Party, led by former airline executive Christopher Luxon, had amassed around 40% of ballots, according to New Zealand’s Electoral Commission. Coalitions are the norm under New Zealand’s mixed-member proportional system, which was introduced in 1996. All the main New Zealand parties pledged to improve the economy, provide relief for the cost of living crisis, boost jobs, and improve health and education facilities, as well as housing.