NZD/USD: RBNZ will continue to send out hawkish signals, supporting the Kiwi – Commerzbank

New Zealand’s Consumer Price Index (CPI) data for the fourth quarter will be released on Tuesday, January 23 at 21:45 GMT. Economists at Commerzbank analyze Kiwi’s outlook ahead of the inflation report.

New Zealand's inflation problem has not been solved yet

I doubt that New Zealand's inflation problem has been solved. The RBNZ is likely to take a similar view – unless today's figures surprise much more to the downside. After all, it has been one of the most hawkish G10 central banks in recent months. The most obvious argument for this is the fact that it has raised interest rates to the highest level (alongside the US). 

As a result, the RBNZ is unlikely to deviate from its approach at its meeting at the end of February, despite falling inflation, and will continue to send out hawkish signals. This should support the Kiwi for the foreseeable future.