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NZD Edges Higher As Rate Cut Expectations Are Pushed Out

NZD
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The Kiwi traded higher on Wednesday, as traders push out their expectations for an RBNZ rate cut to November from October after CPI came in at 4% . The NZD was the top performing G10 currency on Wednesday up 0.58% to 0.5916, while the BBDXY erased Tuesday's gains closing down 0.35% at 1,261.78.

  • The NZD/USD continued to move higher post CPI coming in at 4%, the currency made a high of 0.5925 late into the US session as US yields fell, before finishing the session at 0.5917. The pair still remains in a downtrend as it continues to trade well below the 20, 50, 100 & 200-day EMA, while the 14-day RSI indicator has ticked up from 31.75 to now hover around 37.
  • Key levels to watch: Initial support is 0.5863 (Nov 11 lows) a break here could signal a move to test the yearly lows at 0.5774 (Oct 26 lows) while Initial resistant is at 0.5950 (Apr 15 highs).
  • The US-NZ 2y is down 6bp to -23.75bps
  • New Zealand's headline inflation slowed to 4% in the first quarter, but non-tradables inflation barely slowed to 5.8%, prompting caution from the Reserve Bank. Despite expectations for a rate cut, economists now predict the RBNZ will delay easing monetary policy until February 2025 due to persistent domestic inflation pressures.
  • Option expiries: 0.5995 (NZD780m), 0.5900 (NZD745.3m), 0.6030 (NZD375.5m) Apr 18th NY cut
  • Looking ahead: Next data released will be Trade Balance on Tuesday,
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The Kiwi traded higher on Wednesday, as traders push out their expectations for an RBNZ rate cut to November from October after CPI came in at 4% . The NZD was the top performing G10 currency on Wednesday up 0.58% to 0.5916, while the BBDXY erased Tuesday's gains closing down 0.35% at 1,261.78.

  • The NZD/USD continued to move higher post CPI coming in at 4%, the currency made a high of 0.5925 late into the US session as US yields fell, before finishing the session at 0.5917. The pair still remains in a downtrend as it continues to trade well below the 20, 50, 100 & 200-day EMA, while the 14-day RSI indicator has ticked up from 31.75 to now hover around 37.
  • Key levels to watch: Initial support is 0.5863 (Nov 11 lows) a break here could signal a move to test the yearly lows at 0.5774 (Oct 26 lows) while Initial resistant is at 0.5950 (Apr 15 highs).
  • The US-NZ 2y is down 6bp to -23.75bps
  • New Zealand's headline inflation slowed to 4% in the first quarter, but non-tradables inflation barely slowed to 5.8%, prompting caution from the Reserve Bank. Despite expectations for a rate cut, economists now predict the RBNZ will delay easing monetary policy until February 2025 due to persistent domestic inflation pressures.
  • Option expiries: 0.5995 (NZD780m), 0.5900 (NZD745.3m), 0.6030 (NZD375.5m) Apr 18th NY cut
  • Looking ahead: Next data released will be Trade Balance on Tuesday,