Tuesday saw the New Zealand dollar/sterling rate fluctuate by over 1.46%. Initially, the New Zealand dollar appreciated due to the news that the UK was experiencing negative inflation. However, the markets quickly corrected thanks to the release of the New Zealand producer input and output prices hitting 0.5% and 1% below target correspondingly. This showed inflationary pressure in New Zealand had fallen, which could affect the Reserve Bank of New Zealand, and influence medium term inflation. Some economists are arguing this fall is simply due to the fall in oil prices, and does not represent the future pricing of producers in New Zealand correctly.
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