Kiwi Prints Fresh YtD Low, RBNZ MPR Takes Focus

The release of better than forecast U.S. CPI sent NZD/USD tumbling Tuesday, with the rate staging a foray below a key layer of support, provided by Jun 18/Jul 9 lows of $0.6923. The rate promptly returned above this level, but established itself in negative territory, as the greenback remained the best G10 performer.

• NZ Dep PM Robertson told the Trans-Tasman Business Circle that border restrictions will remain in place "for some time," but the gov't is working with experts on ways to reduce reliance on strict measures.
• RBNZ Monetary Policy Review takes focus in New Zealand today and policymakers may acknowledge the need to tighten policy sooner than projected before. There will be no update on forecasts and no press conference.
• NZD/USD overnight implied volatility (last at 15.79%) jumped to a four-month high of 18.20% on Tuesday, as participants prepared for the RBNZ announcement.
• Local media outlets reported that ASB, New Zealand's second largest home loan lender, has hiked its mortgage rates as the first of the major banks.
• Later this week, focus moves to quarterly CPI data, due Friday. Participants will be looking for confirmation of ample evidence that inflation pressures are mounting, provided by survey data released over the last few months.
• NZD/USD last sits at $0.6947, virtually unchanged on the day. A breach of yesterday's low of $0.6917 would shift focus to Nov 13, 2020 low of $0.6811. On the flip side, gains past Jul 6 high of $0.7105 would give bulls some fresh momentum.