The New Zealand kiwi just fell sharply against the U.S. dollar after the country’s consumer price index came in lower than expected.
Consumer prices in Q4 fell 0.2 per cent versus expectations of a gain of 0.1 per cent. Year-over-year, prices were only up 0.9 per cent versus expectations of a 1.2 per cent advance.
Naturally, one would expect the opposite reaction.
There was one slight disparity: non-tradable prices rose 0.3 per cent in Q4 while tradable prices fell 0.7 per cent.
Perhaps traders expect the weak inflation print to up the chances that the Reserve Bank of New Zealand shifts toward a more accomodative monetary policy stance.
The kiwi fell from its level around $0.84 to a low of $0.8327 post-announcement: