New Zealand just released inflation data for Q2 2024!
The report showed consumer prices rose by 0.4%, which is less than the expected increase of 0.6%. In fact, it is the lowest reading since the second quarter of 2020!
The annual reading of the Consumer Price Index also indicated a decline in price pressures, slowing from 4.0% to 3.3%, the slowest since the second quarter of 2021.
- Core CPI: +0.4% QoQ (0.6% expected, 0.6% prior)
- Annual CPI: +3.3% YoY (3.6% expected, 4.0% previously)
The annual inflation rate for non-tradable goods, a closely watched indicator by the Reserve Bank of New Zealand, also fell from 5.8% to 5.4% over the period.
Link to New Zealand CPI Report Q2 2024
The details showed that increases in housing and household utilities prices – driven by higher rents and real estate prices – led to higher prices. Insurance, cigarettes and tobacco prices also contributed to the rise in the consumer price index.
On the other hand, lower prices of food, transportation, vehicle purchases, and housing contents and services helped lower overall consumer prices.
Market Reactions
New Zealand Dollar vs Major Currencies: 5 minutes
5 minute forex chart of NZD/USD Chart by TradingView
The New Zealand dollar, which had been trading in ranges (except against the US dollar) since the London session, rose on the report.
One reason for the rally could be traders looking to make gains after several days of steady declines. Some analysts also point to persistently high non-tradable inflation, which has reduced the chances of the Reserve Bank of New Zealand cutting interest rates next month.
The New Zealand dollar saw some declines during the first hour of the release, but continued to rise after that until the Asian session opened and things stabilized.