Kiwi Looks Through Inflation Expectations Survey

The kiwi dollar continues to trade with a bearish bias after the publication of domestic inflation expectations data, although it was so even before the release and the report does not seem to have affected the NZD to any significant degree.

• Two-years ahead inflation expectations edged higher to +3.29% Y/Y in Q2 from +3.27% recorded in the previous quarter. This time horizon provides the most interest, as the RBNZ believes that their monetary policy decisions take around two years to exert full impact on inflation.
• The uptick in one-year ahead inflation expectations was even more pronounced, it rose to +4.88% from +4.40% prior. But further out curve, respondents expected a marginally slower price growth (2.11% vs. 2.12% previously) 10 years from now.
• The data were taken from the RBNZ's survey of forecasters, economists and industry leaders and do not necessarily reflect the views of the central bank or New Zealand consumers.
• NZD/USD last trades at $0.6268, down 32 pips on the day, with the $0.6232 Fibo retracement level providing the initial layer of support.