We remain in the midst of a rather quiet period of macroeconomic news out of New Zealand, with no tier-1 reports out yet in 2024.
The New Zealand dollar instead continues to trade on global risk sentiment and news out of China. The PBoC’s surprise decision to hold its 1-year MLF rate unchanged today has triggered a bout of selling in both AUD and NZD this morning, with the New Zealand dollar slipping to its lowest level since mid-December amid fears over the health of Asia’s largest economy.
Domestic activity should begin to pick up pace in the next few weeks, with a handful of economic data releases likely to ramp up volatility in the New Zealand currency. Q4 business confidence (Monday) and the December PMIs (Thursday) will be closely watched by investors. Market participants will also likely have one eye on next Tuesday’s Q4 inflation report, which will be key in determining the direction and timing of RBNZ interest rate changes in the coming few months.
