NZ Dollar Flat-to-Higher on CPI, Easing Lockdown Restrictions

The New Zealand dollar traded flat or higher against its most-traded counterparts today. There were two reasons for the currency’s good performance: the government’s plans to ease the lockdown restrictions and positive inflation data released today.
New Zealand Prime Minister Jacinda Ardern announced that the government will reduce the threat level one notch to three next week, allowing some businesses to open. That should benefit the nation’s economy greatly. With one of the lowest coronavirus infection rate per capita in the world, New Zealand weathered the pandemic extremely well. The government will review the lockdown restrictions on May 11 again, perhaps reducing the threat level further down to two.
Meanwhile, Statistic New Zealand reported that the Consumer Price Index rose by 0.8% in the March quarter of 2020. The actual value was two times the forecast increase of 0.4%. The biggest contributor to the rise was higher prices for cigarettes and tobacco. Unsurprisingly, the biggest decline was in passenger transport services. Analysts warned, though, that with many businesses closed, for now, the data does not reflect the underlying state of the New Zealand economy, and the index may collapse after the lockdown ends.
NZD/USD rose from 0.6023 to 0.6044 as of 6:50 GMT today. NZD/CHF gained from 0.5827 to 0.5853. NZD/JPY climbed from 64.63 to 65.16.

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