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NZD Firms on RBNZ, Tilting AUD/NZD Off Highs

FOREX
  • NZD trades firmer ahead of the NY crossover, with NZD/USD cresting at a recovery high of 0.6078 on the back of the unchanged RBNZ rate decision overnight. While the OCR was kept unchanged at 5.50% (alongside expectations), the stressing of the importance of anchored inflation expectations added a hawkish tilt to the statement, helping NZD outperform vs. broader G10.
  • The USD Index has reverted back above the 50-dma support - a level tested during Tuesday trade, but not firmly broken. A soft CPI release today could put the level under pressure once more, crossing today at 103.965.
  • Elsewhere, GBP trades better, with GBP/USD testing the 1.2700 handle at typing to keep pressure on the weekly recovery high of 1.2709 - first major resistance in the pair.
  • JPY is among the weakest despite yesterday's report that the BoJ could upgrade their inflation view in light of recent pay settlements, keeping USD/JPY within striking distance of major resistance at the psychological Y152.00 level.
  • US inflation data takes focus going forward, with markets expecting Y/Y CPI to tick higher to 3.4%, while ex-food and energy moderates to 3.7%. The Bank of Canada rate decision also crosses, at which markets expect no change to headline policy rates of 5.00%. The speaker schedule includes Fed's Bowman, Goolsbee and Barkin.
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  • NZD trades firmer ahead of the NY crossover, with NZD/USD cresting at a recovery high of 0.6078 on the back of the unchanged RBNZ rate decision overnight. While the OCR was kept unchanged at 5.50% (alongside expectations), the stressing of the importance of anchored inflation expectations added a hawkish tilt to the statement, helping NZD outperform vs. broader G10.
  • The USD Index has reverted back above the 50-dma support - a level tested during Tuesday trade, but not firmly broken. A soft CPI release today could put the level under pressure once more, crossing today at 103.965.
  • Elsewhere, GBP trades better, with GBP/USD testing the 1.2700 handle at typing to keep pressure on the weekly recovery high of 1.2709 - first major resistance in the pair.
  • JPY is among the weakest despite yesterday's report that the BoJ could upgrade their inflation view in light of recent pay settlements, keeping USD/JPY within striking distance of major resistance at the psychological Y152.00 level.
  • US inflation data takes focus going forward, with markets expecting Y/Y CPI to tick higher to 3.4%, while ex-food and energy moderates to 3.7%. The Bank of Canada rate decision also crosses, at which markets expect no change to headline policy rates of 5.00%. The speaker schedule includes Fed's Bowman, Goolsbee and Barkin.