Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Kiwi Knocked Down By Weak CPI

Published 10/23/2014, 02:54 AM
Updated 03/09/2019, 08:30 AM

New Zealand dollar was knocked down in Asian session sharply by weaker than expected inflation data. CPI rose 0.3% qoq in Q3 while the annual rate slowed to 1.0% yoy, missing expectation of 1.3% yoy and compared with expectation of 1.6% yoy. That's also lower than RBNZ's expectation of 1.3% and could prolong the central bank's pause in the tightening cycle. According to swaps data, markets are pricing 80% chance that RBNZ would keep OCR unchanged at the current 3.50% by the end of first half next year. There were also talks that RBNZ could delay the next hike till as late as September 2015.

Today's downside acceleration in NZD/USD argues that recent consolidation from 0.7707 is possibly completed at 0.8034 already. Focus is now back on 0.7805 minor support. Break will indicate that fall from 0.8835 is likely resuming. Also, note that such decline is viewed as the third leg of the pattern from 0.8842 high. Break of 0.7707 will target long term fibonacci level of 38.2% retracement of 0.4890 to 0.8842 at 0.7332.

NZD/USD Daily Chart

NZD/USD Weekly Chart

Elsewhere, dollar is maintaining yesterday's gain and is possibly gathering momentum for further rally. In particular, focus is on 1.2624 minor support in EUR/USD and 0.9561 minor resistance in USD/CHF. Break there will trigger further rise in the greenback through recent high. Sterling stays soft against the greenback after BoE minutes but is firm against Euro. Canadian dollar had a brief rise after BoC kept rates unchanged yesterday but is quickly back into established range. Further dip in EUR/USD could help push USD/CAD back towards 1.1385 resistance.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Considering that, the PMI data from Eurozone would be closely watched today. Eurozone manufacturing PMI is expected to drop to 50.0 in October while services PMI is expected to drop to 52.0. German manufacturing and services PMI are also expected to drop slightly. From UK, retail sales, Mortgage approvals and CBI trends total orders will be released. US will release jobless claims, house price index and leading indicators.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.