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NZD/USD Falls After Stronger US CPI, FinMin Spoke On Budget Deficit

NZD

The Kiwi crept higher post RBNZ decision, making a high of 0.6083 before higher than expected CPI inflation data caused the USD to turn bid. NZ FinMin spoke earlier on the Deficit. The NZD was one of the worst performing G10 currencies down 1.37%, beaten by NOK, SEK & AUD while the BBDXY made new YtD highs of 1251.81 before finishing the session up 0.75% to 1,250.13.

  • The NZD/USD fell sharply on as US CPI was released from 0.6083 to a intraday low of 0.5966 erasing the last weeks gains, the pair now targets the April 1 and YtD lows of 0.5940.
  • Key levels to watch: Initial support is at 0.6040 (Apr 1 & YtD lows) below here then 0.5900 (round number support). Initial resistant lays at 0.6100 (round number resistance) a break here would open a move to 0.6025 (20-day EMA).
  • The US-NZ 2y is now at multi-year highs of -8.5bps
  • Earlier, New Zealand Finance Minister Nicola Willis outlined a strategy to address the government's structural deficit gradually over several years, aiming to reduce debt to 40% of GDP while focusing on sustainable spending and promising meaningful tax reductions within a new operating allowance to avoid inflationary pressures, while also emphasizing support for the Reserve Bank's efforts to stabilize inflation.
  • Option expiries: Apr 10 NY Cut 0.5850 (NZD625m), upcoming notable strikes included 0.5955 (NZD1.22b April 11), 0.5750 (NZD610m April 12), 0.6050 (NZD550.4m April 12)
  • Looking ahead: Today NZGBs Auctions, while Friday we have BusinessNZ Manufacturing PMI
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The Kiwi crept higher post RBNZ decision, making a high of 0.6083 before higher than expected CPI inflation data caused the USD to turn bid. NZ FinMin spoke earlier on the Deficit. The NZD was one of the worst performing G10 currencies down 1.37%, beaten by NOK, SEK & AUD while the BBDXY made new YtD highs of 1251.81 before finishing the session up 0.75% to 1,250.13.

  • The NZD/USD fell sharply on as US CPI was released from 0.6083 to a intraday low of 0.5966 erasing the last weeks gains, the pair now targets the April 1 and YtD lows of 0.5940.
  • Key levels to watch: Initial support is at 0.6040 (Apr 1 & YtD lows) below here then 0.5900 (round number support). Initial resistant lays at 0.6100 (round number resistance) a break here would open a move to 0.6025 (20-day EMA).
  • The US-NZ 2y is now at multi-year highs of -8.5bps
  • Earlier, New Zealand Finance Minister Nicola Willis outlined a strategy to address the government's structural deficit gradually over several years, aiming to reduce debt to 40% of GDP while focusing on sustainable spending and promising meaningful tax reductions within a new operating allowance to avoid inflationary pressures, while also emphasizing support for the Reserve Bank's efforts to stabilize inflation.
  • Option expiries: Apr 10 NY Cut 0.5850 (NZD625m), upcoming notable strikes included 0.5955 (NZD1.22b April 11), 0.5750 (NZD610m April 12), 0.6050 (NZD550.4m April 12)
  • Looking ahead: Today NZGBs Auctions, while Friday we have BusinessNZ Manufacturing PMI