New Zealand’s Q4 inflation data came in slightly below expectations, with headline CPI at 2.2% and non-tradable inflation dropping to 4.5%, its lowest since late 2021 and below the Reserve Bank of New Zealand’s (RBNZ) projections. This weaker-than-expected inflation supports the likelihood of a 50 basis point rate cut by the RBNZ at its February 19 meeting, a move now fully priced in by markets. Analysts expect this cut to be followed by two additional 25 basis point cuts, bringing rates to 3.25% as the RBNZ shifts focus toward growth concerns and frontloading easing.
In the currency market, NZD/USD could find some near-term support above 0.570, aided by reduced fears of U.S. tariffs on China and a technical rebound. However, the currency remains under pressure, as the RBNZ’s dovish stance provides little domestic support. The broader trajectory of NZD/USD will likely depend on U.S. trade policy developments under President Trump.
https://www.fxstreet.com/news/nzd-inflation-data-paves-the-way-for-half-point-cut-ing-202501220936


