According to the latest Reserve Bank of New Zealand (RBNZ) survey, New Zealand’s (NZ) both one and two-year inflation expectations plunged in the second quarter of 2020.

Business managers forecast annual inflation averaging 0.74% over the coming year vs. 1.88% previous.

Two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, fell to 1.24% from 1.93% last. The last uptick was the first in six quarters.

Kiwi unfazed

The NZD bulls ignore the steep drop in the NZ inflation expectations for Q2, as NZD/USD trades comfortably above 0.6000, courtesy Chinese exports data surprise for April.

At the time of writing, the kiwi trades at 0.6020, up 0.22% and close to daily highs of 0.6026.