At 6:45 PM EST, on Monday, April 19th 2010, Statistics New Zealand releases its quarterly Consumer Price Index (CPI).
This index tracks price changes in consumer goods and services. It is determined by averaging a basket of goods and services then comparing it to the previous average. Consumer prices are the prime driver for inflation; therefore this index is extremely important for Forex traders. As prices rise, the relative inflation potential is increased which can trigger rate increases by the Central Bank to counteract. If the actual figure is larger than the forecast, it is considered bullish for the NZD. If the figure misses, it is a bearish sign.
The forecast figure is 0.6% which is an increase from negative 0.2% last time. I believe this is overly optimistic given the underlying framework. If the figure misses expect fireworks in the currency.
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.