The New Zealand dollar traded around US$0.562 early Thursday after a split Reserve Bank of New Zealand decision, with U.S. growth and inflation data due later that day.
FXStreet reported NZD/USD near US$0.5620 at 12:19 a.m. ET (04:19 UTC), after the pair reached 0.5635-0.5640 during Asian trading. A separate daily observation from the RBNZ put the exchange rate at US$0.56235 per New Zealand dollar on Oct. 29, following US$0.56085 on Oct. 28 and US$0.56925 on Oct. 27.
The RBNZ’s Oct. 28 rate decision left the official cash rate at 2.75%. The Monetary Policy Committee split four to three: three of its seven members favored raising the rate by 25 basis points to 3%, while four supported a hold. The committee said additional tightening would probably be needed, with the path dependent on the economic outlook.
Annual CPI inflation fell to 3.7% in the September quarter from 4.1% in the June quarter. The RBNZ projected a rise to 4.4% in the December quarter, driven largely by fuel prices. Four members backing the hold wanted time to assess two earlier increases. The three favoring a hike argued persistent core inflation risked becoming embedded. The meeting record described household spending as subdued, while commodity prices, goods exports and tourism supported export-oriented sectors.
The Federal Reserve held its target range at 3.75% to 4% on Oct. 28 in a 10-2 vote. Two officials favored a 25-basis-point increase. The Fed described economic activity as expanding briskly and said inflation was still running high. CME Group said its FedWatch tool, based on 30-day federal funds futures, showed an 84.5% probability of a hike at the Dec. 9 meeting before the Oct. 28 decision. That was a market estimate, not a Fed forecast.
The Bureau of Economic Analysis (BEA) scheduled its advance estimate of third-quarter U.S. GDP and September personal income and outlays for 8:30 a.m. EDT Thursday (12:30 UTC). The outlays release includes the personal consumption expenditures price index. The Fed’s next meeting is scheduled for Dec. 8-9, and the RBNZ’s next policy decision is due Dec. 9.
