A good session for the Kiwi overnight as the local unit capitalized on a weaker than expected US CPI print out of the worlds largest economy. NZD/USD rose 40 pips on the news and finished up 1.3% on the day to reach levels around 0.6530. Given the Kiwi was the second best performing currency on the day, the AUD/NZD was pushed lower, down from 1.0940 to 1.0900.
Global and NZ equity markets also fell for the second consecutive day with no single trigger able to explain the moves. Worries about the impact of higher oil prices, a sharp rise in US yields and escalating US-China trade tensions have all been put forward as possible drivers.
Looking to the day ahead, NZD traders will be watching BNZ manufacturing PMI data for September before turning their attention towards RBA financial stability review and home loan data out of Australia. With very few risk events ahead for the NZD, it will continue to take cues from global risk sentiment, commodity prices and further fallout in equity markets. On the technical front, NZD/USD remains well supported at the 0.6420 level with any topside moves expected to meet resistance on moves approaching 0.6529.