The New Zealand dollar has been showing plenty of volatility over the past week but is steady on Wednesday. After plunging 2.56% last week, the currency has rebounded, recovering about half of those losses this week. NZD/USD has taken a pause on Wednesday after New Zealand posted mixed employment data for Q4.
New Zealand’s unemployment rate fell from 3.3% to 3.2%, better than the forecast of 3.4%. However, job creation was minimal with a gain of 0.1%, shy of the consensus of 0.4%. The labour cost index rose slightly, from 2.4% to 2.6%, missing the estimate of 2.9% age growth remains way below inflation, which clocked in at 5.9% in the fourth quarter?
Wage growth lagging inflation
The wage growth release could have a significant impact on monetary policy. The RBNZ is expected to raise rates by 0.25% at the February 23rd meeting, which would mark back-to-back rate rises. With wages lagging inflation by a wide margin, the RBNZ may decide to slow the pace of rate increases in 2022, even if inflation remains high. This stance is based on the premise that high inflation is transient and will ease if wage growth is not strong. The central bank is expected to normalize policy with a series of rate hikes which could extend into 2023.
The New Zealand dollar shot up 0.96% on Tuesday, buoyed by strong trade numbers. Exports were up and imports decreased, and as a result, New Zealand’s trade deficit fell from over NZD 1.06 billion to NZD 477 million. This is another indication that the recovery is gathering steam, even though the country has essentially closed its borders to the outside world.
The New Zealand currency has been under pressure, with investors pricing in five rate hikes from the Federal Reserve over the course of the year. There are projections for as many as seven hikes this year, and any guidance from the Fed, which has not been very clear on how many hikes to expect, could shake up the currency markets.
NZD/USD Technical
- NZD/USD has support at 0.6472 and 0.6402
- 0.6670 is a weak resistance line, followed by 0.6798
면책 조항: 본 게시글에 표현된 견해는 전적으로 작성자의 견해이며 Followme의 공식 입장을 대변하지 않습니다. Followme는 제공된 정보의 정확성, 완전성 또는 신뢰성에 대해 책임을 지지 않으며, 서면으로 명시적으로 언급되지 않는 한 해당 내용을 기반으로 취해진 어떠한 조치에 대해서도 책임을 지지 않습니다.
