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KIWI
KIWI: NZD/USD ran out of steam ahead of its 50-DMA ($0.6598), registering a high
of $0.6596, after stronger than exp. headline NZ CPI generated a bid for the
kiwi.
- Many attributed the strong headline to transitory factors & suggested that the
RBNZ will be happy to look through the release (it is worth noting that the
headline readings topped all exp., including the RBNZ's own projections). As a
reminder, in September the RBNZ stated that "there are welcome early signs of
core inflation rising towards the mid-point of the target. Higher fuel prices
are likely to boost inflation in the near term, but we will look through this
volatility as appropriate. Consumer price inflation is expected to gradually
rise to our 2 percent annual target as capacity pressures bite."
- The RBNZ's own sectoral inflation model was unch. at 1.7% Y/Y in Q3.
- The rate last deals at $0.6565, ~15 pips or so higher on the day, back below
its 21-DMA ($0.6568). Bulls look for a move back above the 21-DMA so that they
can focus on a challenge of the session highs & 50-DMA. Bears ultimately target
initial support at $0.6460, ahead of the YtD low ($0.6425).
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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