The quarterly print of New Zealand’s (NZ) headline inflation, per the Consumer Price Index (CPI), released by Statistics New Zealand is out for the first quarter (Q1) of 2023 and is as follows:

• New Zealand Q1 CPI 1.2% QoQ versus the expected 1.7% and 1.4% prior.
• NZ CPI eased to 6.7% YoY compared to 7.1% market forecasts and 7.2% YoY prior.

NZD/USD plummets

With the NZ CPI being well-behind the Reserve Bank of New Zealand’s (RBNZ) 7.3% target, as well as the downbeat of late, the dovish odds surrounding the RBNZ weigh on the NZD/USD price.

As a result, the Kiwi pair dropped near 25 pips on the data release, down 0.35% intraday near 0.6175 by the press time of early Thursday morning in Asia.

Also read: NZD/USD Price Analysis: Bears eye a continution to 0.6120

About NZ CPI

With the Reserve Bank of New Zealand's (RBNZ) inflation target being around the midpoint of 2%, Statistics New Zealand’s quarterly Consumer Price Index (CPI) publication is of high significance. The trend in consumer prices tends to influence RBNZ’s interest rates decision, which in turn, heavily impacts the NZD valuation. Acceleration in inflation could lead to faster tightening of the rates by the RBNZ and vice-versa. Actual figures beating forecasts render NZD bullish.