17.04.202602:02:36UTC+00New Zealand Dollar Declines

The New Zealand dollar slipped to around $0.588 after softer food inflation and moderating consumer spending strengthened expectations that the Reserve Bank of New Zealand will leave interest rates on hold for now. Food prices, which make up nearly 19% of the CPI basket, rose 3.4% year-on-year in March, down from 4.5% in February and the lowest pace in just over a year. At the same time, core electronic card spending grew 0.7% month-on-month, slowing from a 1.4% increase previously. Together, these figures indicate cooling inflation and softer demand, reducing the urgency for further near-term policy tightening.

Still, although price pressures are easing in some components, underlying inflation remains a concern, and the RBNZ has recently signaled it is prepared to raise rates again if core inflation re-accelerates. Despite the latest pullback, the kiwi is holding near a more than five-week high, supported by improved risk sentiment amid hopes for a negotiated resolution to the conflict in the Middle East.