Kiwi Recoups Losses, RBNZ Weighs Implications Of Higher Oil Prices

NZD/USD clawed back its initial losses on Monday amid strong performance from the commodity complex. Participants assessed the consequences of Russia's aggression against Ukraine/Western sanctions against Moscow, which overshadowed any local developments.

• RBNZ Asst Gov Hawkesby told interest.co.nz that the central bank is closely watching the implications of oil price increases, resulting from the Russian invasion of Ukraine, for domestic inflation over the medium term. Hawkesby noted that "if oil prices stay where they are at the moment," then "we'll have higher CPI outturns over the next quarter or so than we had factored into our statement."
• Looking ahead, focus turns to New Zealand's building permits & terms of trade (Wednesday) as well as ANZ Consumer Confidence (Friday).
• NZD/USD trades flat at $0.6772 at typing. A clearance of Feb 23/Jan 19 highs of $0.6809/12 would shift focus to Jan 13 high of $0.6891. Conversely, a retreat under Feb 24 low of $0.6631 would bring Feb 14/4 lows of $0.6593/90 into play.