Forex
New Zealand dollar falls to 11-month low as oil prices spike
The New Zealand dollar fell to its lowest level in 11 months, while consumer confidence slipped to 97.6 as oil prices spiked.
Household inflation expectations eased slightly, which would normally take some pressure off the central bank RBNZ, but the late-month rise in oil prices remains the more relevant signal for traders, since fuel costs quickly feed into household price perceptions.
For beginners Exchange rates respond to both rate expectations and external shocks like commodity prices: lower inflation expectations reduce the likelihood of central bank tightening, which can weaken a currency.