NZD Recovers from Two-Week Lows as RBNZ Survey Cools Inflation Expectations

The New Zealand Dollar (NZD) has recovered from its two-week lows against the US Dollar (USD), buoyed by a dovish survey from the Reserve Bank of New Zealand (RBNZ).

The RBNZ survey showed inflation expectations easing in the third quarter, slipping to 2.34% from 2.53% previously.

This decrease in inflation expectations gives the central bank less reason to tighten policy, adding to a dovish backdrop for the NZD.

The USD has lost momentum due to soft US producer prices and an increase in weekly Initial Jobless Claims, which have cooled bets on further Federal Reserve tightening.

Brown Brothers Harriman's Elias Haddad highlights that 'overall, inflation expectations remain close to the RBNZ 2% target midpoint for inflation, underscoring the bank's credibility.'