Kiwi dollar holds steady ahead of RBNZ, Aussie awaits inflation test
TLT•The kiwi dollar was little changed at $0.57 ahead of a Wednesday RBNZ decision, with markets fully pricing a third rate hike this year to 3.0%. The Aussie was flat at $0.7030 ahead of quarterly inflation data that could influence the RBA’s next rate decision.
1. RBNZ decision in focus
The kiwi dollar was steady on Monday after gaining 0.8% last week. Markets were fully pricing a 25-basis-point RBNZ hike on Wednesday, taking the cash rate to 3.0%, while attention turned to whether policymakers signal another move in December. Westpac expects hikes this week and in December, followed by another in February, which would take the cash rate to 3.5%, said senior economist Satish Ranchhod.
2. Aussie awaits inflation data
The Aussie was flat at $0.7030 after rising 1.3% last week. Forecasts for Wednesday’s quarterly report centre on a 1% increase in trimmed mean inflation, with the annual rate at 3.6%, above the RBA’s 2% to 3% target range. Commonwealth Bank of Australia economist Trent Saunders said the RBA’s decision would depend heavily on the CPI result and its composition. Governor Michele Bullock and other senior officials are also due to appear before lawmakers on Wednesday.
