NZD/USD Heads Lower Post US CPI, Food Prices Fall In Feb

NZD weakened 0.31% against the USD following the latest US inflation figures for February which showed stubbornly high inflation. The pair reached a high of 0.6184 as CPI was announced before reversing and trading down to the 20 & 50-day EMA at 0.6135/6140 area, closing the session just off those levels at 0.6149. RBNZ Governor Orr Spoke in London late Tuesday, however there were no speaking notes and Food Price data has been released falling 0.6% in Feb

• Key levels to watch: Initial resistance at 0.6217 (Mar 8 high), a break above opens a move to the 0.6250 area (Jan 15 high). Initial support at 0.6136 (Mar 12 lows), below here, 0.6115/.6120 (100 & 200-day EMA).
• Option expiries, there are US$1.605b of NZD/USD puts at a strike of 0.6161-0.6185 expiring between Mar 12th and March 15th.
• Kiwibank economists suggest that central banks may need to adopt looser inflation targets due to the escalating climate-related costs, making the current 2% target challenging. The structural impact of climate change on inflation, including rising costs in various sectors, could prompt a shift toward higher and more flexible inflation targets in the future, but not immediately, as central banks prioritize maintaining credibility and addressing the aftermath of the COVID-19-induced inflation.
• Looking ahead, RBNZ Gov Orr will again speak to Clients in London, there are no notes expected, while Thursday Reinz House Sales are Due out.