On Monday, the New Zealand Bureau of Statistics released the inflation data that increased from 3.3 percent to 4.9 percent year-over-year in the third quarter period.
This figure managed to exceed the expectations of economists who predicted a rise of 4.1% only. The New Zealand's positive inflation data was largely due to a 6.0% rise in housing and utilities.
In addition, the cost of home ownership which rose 12% is affected the cost of rent in several major New Zealand cities as well. That can be seen from the data released so far.
Regionally,the house rents rose 1.0% in Wellington, 0.7 per cent in Canterbury and 0.3% in Auckland. The amount of that increase is different, but the trend is for sure the same.
The Food Cost is Raising too
In addition to the housing sector, food costs also increased moderately by 2.7 percent in the third quarter. The increase in food prices was largely driven by the vegetable prices jumping.
That rose by up to 19%. The cost of fast food and restaurants also increased by 4.5%. Meanwhile, the rally in world energy commodity prices in recent times has also affected the New Zealand inflation.
This condition is reflected in the transportation sector which experienced a 4.2% so far. That increase due to the rise in gasoline prices by 6.5% in the market.
The cost of the flight even shot up to 66%. It is sure that transportation and gasoline are the two things which cannot be separated. They are related between one and another.
The New Zealand dollar Has Soared Before
In general, the release of New Zealand inflation data this morning was very positive as it further raised the prospect of an RBNZ rate hike. It also brings an impact for the currency.
This inevitably triggered the rise of the NZD against the US Dollar to break the psychological level of 0.7100. However, this strengthening did not last long and that is the fact.
When this news was written, the NZD/USD pair had corrected and was trading at the range of 0.7075. After that the change was happened because of the several factors.
When it was measured from the daily Open level, the New Zealand Dollar is now only strengthening by 0.06% versus the USD. That was not the significant one for sure.
Japanese Yen was Slipped
The Japanese yen slipped to a three-year low Level on Friday. That currency was set for its worst week since March 2020, while the dollar headed for its first weekly decline.
It is especially versus some major currencies since the early last month as global risk appetite recovered. In the cryptocurrency market, the price of bitcoin reached $60,000 for the first time.
That was happened in six months and is not far from a high record on bets where the America’s regulators will approve the funds traded on bitcoin futures exchanges.
The dollar index slipped by 0.1% to 93.9 and fell 0.2% for the week. This movement would be the first weekly loss in the 6 weeks period. The greenback tends to rise when investors look for security.
Global Market have Rallied
Elsewhere, the Global stock markets have rallied this week as the concerns about a stagflationary economy which have been eased by corporate earnings topping forecasts in the United States.
The Japanese yen was the weakest currency and it was dropping to 114.4 yen per dollar. That is the weakest since October 2018. The yen is a safe-haven currencye example.
However, it has been hit by a rebound in sentiment including in Asia. The dollar was 0.5% higher at 114.31 yen which brought a weekly gain for the greenback of 1.9%.
