The NZD/USD exchange rate faced some volatility this morning, as Monday’s survey showed diminished New Zealand inflation expectations in the Q3. After the release, the pair dropped to the 0.7397 level, then bounced back and edged higher to 0.7407 some minutes later. The survey revealed that two-year inflation forecasts edged lower to 2.1% from 2.2% previously, underscoring why the Reserve Bank of New Zealand remained committed to its simulative monetary policy. Moreover, the nation’s Central Bank is largely expected to keep the key interest rate at a record-low level of 1.75% at its Wednesday’s meeting, aiming to encourage the consumer prices inflation growth, which weakened more than anticipated in the Q2.
