RBNZ Gov Orr Warns Against Inflationary Fallout From Russian Attack On Ukraine

The flight to safety caused by Russia's invasion into Ukraine pulled the rug from under NZD/USD Thursday, with Wednesday's hawkish RBNZ monetary policy decision now in the books. The rate trimmed losses late doors as risk assets got some reprieve after U.S. President Biden said that the West would hold off from revoking Russian access to the SWIFT payment system.

• RBNZ Gov Orr warned that the implications of Russian aggression against Ukraine are "all in the direction of supply being constrained, these large rises we've seen in commodity prices feeding through into general consumer price inflation."
• New Zealand's retail sales ex inflation surged 8.6% Q/Q in the final quarter of 2021, beating the median estimate of +6.1% and reversing the 8.2% decline registered in Q3. Meanwhile, monthly trade deficit widened to NZ$1.082bn in January from NZ$975mn prior.
• Looking ahead, next week's data highlights include ANZ Business Confidence (Monday), building permits (Wednesday) and ANZ Consumer Confidence (Friday).
• NZD/USD operates at $0.6690, down 4 pips on the day. Bears look for renewed losses past Feb 14/4 lows of $0.6593/90, which would shift focus to Jan 28 low of $0.6530. Conversely, a rebound above Feb 23/Jan 19 highs of $0.6809/12 would bring Jan 13 high of $0.6891 into view.