NZD/CAD holds near 2-week high, focus on RBNZ

The NZD/CAD currency pair held in proximity to a 2-week high of 0.8253 on Tuesday ahead of the outcome of the RBNZ’s policy meeting on Wednesday.

The Reserve Bank of New Zealand is expected to keep its official cash rate intact at 2.25% at its February meeting.

In November, the RBNZ lowered its policy rate by 25 bps to 2.25%, bringing borrowing costs to their lowest level since mid-2022, due to significant spare capacity in the NZ economy and easing inflation pressures.

RBNZ Governor Ann Breman had said the official cash rate would likely stay without change for an extended period. This outlook assumed economic conditions evolved as expected.

Expectations for a restrictive RBNZ policy path have provided support to the kiwi dollar.

Meanwhile, market players will also be looking into Canadian CPI inflation data for January due out later today.

The median CPI inflation probably remained stable at 2.5% in January, according to market consensus.

The trimmed-mean core inflation rate, the Bank of Canada’s preferred measure of underlying inflation, probably eased to 2.6% in January from 2.7% in December.

The NZD/CAD currency pair was last up 0.20% on the day to trade at 0.8244.