Back in July, I gave you my central bank round-up for the year.

I told you which bankers were still cutting rates, which were holding steady and my first picks for who would raise rates first, including Australia, New Zealand and the Eurozone.

At the time I showed you a chart from www.tradingeconomics.com and mentioned that most countries were saddled with 0% rates. Here’s what that same graph looks like today…

Again, Australia and New Zealand Are Still
the Only Majors With Yield

Looking at the graph above, it’s no wonder that Australia was the first to hike rates and offer better yields for us Forex traders first.

But even more interesting is where inflation stands today. When I wrote to you a few months ago, Australia had the highest inflation at 2.5%, and rightly so. But now, with the Reserve Bank of Australia hiking rates, New Zealand’s inflation has leapt ahead of its big brother to the West…

New Zealand Pulls Ahead in the Race Back to Inflation

In my mind, this means that New Zealand will be the next country to hike, now that Australia and Norway have already stepped up to raise interest rates.

In short, my views haven’t changed…but inflation has. Keep an eye on the inflation rates and you’ll have an idea of which country will hike next.

Happy Trading!
Sean Hyman, aka Professor FX