The NZD/USD is Flying on CPI
The NZD/USD has been in a sharp downturn in recent times, but today’s stronger than expected CPI print might be a chance to reassess.
We saw inflation come in at 0.9% vs 0.7% QoQ.
Rate rises are not something that has been on the agenda in New Zealand, however, any chance of a cut might well have just fallen away a little bit.
Overall, I would say the yearly print of 1.9% is still far too low for the RBNZ and as such the economy still has a bit of work to do to reach the 2-3% target band.
Either way, we are seeing strong buying coming in and now the Kiwi is the clearly the big mover of the day to the upside.
The Kiwi Outlook
Currently, price has spiked into an area just below the 0.6600 level. There really hasn’t been much support or resistance here recently and the major level is still a fair way off.
I think resistance at 0.6700 is really the major overhead level.
However, given the fact that the NZD is trailing the USD by so much, it is still the Greenback that is dictating the price action at the moment. Should the USD rebound today, I feel all those gains could easily be wiped out.
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