NZD - New Zealand Dollar
The New Zealand dollar saw a full one cent drop on open yesterday morning as the CPI reading came in weaker than expectations. Opening at 0.6767, the Kiwi dropped to an intraday low of 0.6665 as consumer price inflation grew by just 0.1% in the first quarter of 2019. Missing expectations of 0.3% disappointed investors, causing a sell off immediately for the local currency.
The annualised reading of 1.5% fell from the previous quarter of 1.9% and falls from the Reserve Bank of New Zealand’s target of 2%. The lower release will put pressure on the RBNZ to cut the official cash rate of 1.75% which has been steady since 2016.
The Kiwi rebounded to afternoon highs of 0.6744 following a strong data set from China which included an industrial production figure growing at its fastest pace in five years.
From a technical perspective, the NZD/USD pair is currently trading at 0.6725. We continue to expect support to hold on moves approaching 0.6700 while now any upward push will likely meet resistance at 0.6780.
The strong data set from China yesterday saw a boost to risk appetite in general as the greenback weakened against a basket of currencies during the Asian trading session. The Dollar Index (DXY) declined from the 97 handle to intraday lows of 96.82. Both the Australian and Kiwi were the main beneficiaries of Chinese impressive industrial production figures.
The Pound slipped lower on their own consumer price index release as the 12-month print came in at 1.9% and slightly missed expectations of 2.0%. Cable has slipped from weekly highs of 1.3130 to 1.3040 overnight as the Great British Pound movements continue to be determined by Brexit announcements.
There was little to take note otherwise overnight as investors look to close out their positions heading into the long weekend for Easter. Of note this evening to round off the short week of trading is the release of Retail Sales in the United States and the UK.
0.6700 - 0.6800 ▼NZD/EUR:
0.5900 - 0.6000 ▼NZD/AUD:
0.9300 - 0.9420 ▼GBP/NZD:
1.9250 - 1.9600 ▲NZD/CAD:
0.8900 - 0.9020 ▼