Domestic Inflation Pressures Fail To Rescue Kiwi From Post-FOMC Hit

The Fed's hawkish turn sent NZD/USD into a tailspin, driving a sharp sell-off to the rate's worst levels since Oct 2020. Stronger than expected CPI data released out of New Zealand failed to provide any reprieve to the kiwi dollar, with a hawkish RBNZ policy outlook largely priced in.

• The pair last sits at $0.6584, little changed on the day. Bears need a dip through Oct 20/8, 2020 lows of $0.6552/47 before targeting $0.6512, which limited losses on Sep 24, 2020. Bulls need a rebound above Jan 19 high of $0.6812 to breathe a sigh of relief.
• ANZ Consumer Confidence edged lower to 97.7 this month from 98.3 in December, as rising living costs, rapid cooling in the housing market and more expensive credit discouraged consumer spending.
• Jacinda Ardern's personal approval rating fell to the lowest level since before she became PM in 2017 (as per the latest 1News-Kantar poll), with her government drawing some criticism as inflation accelerates and Covid-19 response is dragging on.
• Focus turns to New Zealand's trade data (postponed until Tuesday) as well as the closely watched labour market report (Wednesday).