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Yen Sales Resume, Kiwi Takes Hit From CPI Miss

FOREX

The kiwi dollar sank after New Zealand's Q1 inflation data missed expectations. The annual rate of price growth rose to a multi-decade high of +6.9% Y/Y, slightly below the median estimate of +7.1%. The data failed to move the needle when it comes to RBNZ rate-hike pricing, as data confirmed that price pressures remain acute, with key metrics of core inflation (tradable CPI & sectoral factor model) advanced to fresh all-time highs.

  • NZD weakness spilled over into its Antipodean cousin, which struggled to regain poise, even as firmer crude oil prices lent support to CAD and NOK. A rally in AUD/NZD was capped by the psychologically significant NZ$1.1000 figure and the rate pared gains.
  • Participants returned to dumping the yen, which landed at the bottom of the G10 pile. Better risk backdrop sapped strength from the embattled currency, despite continued warnings from Japanese officials.
  • Offshore yuan caught a bid after an in-line yuan fixing from the PBOC, which came on the heels of strong weak bias in yesterday's fixing. Spot USD/CNH bounced later in the session, soaring to fresh multi-month highs.
  • U.S. weekly jobless claims & final EZ CPI will take focus later today, alongside comments from Fed's Powell, ECB's Lagarde and BoE's Bailey & Mann.
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The kiwi dollar sank after New Zealand's Q1 inflation data missed expectations. The annual rate of price growth rose to a multi-decade high of +6.9% Y/Y, slightly below the median estimate of +7.1%. The data failed to move the needle when it comes to RBNZ rate-hike pricing, as data confirmed that price pressures remain acute, with key metrics of core inflation (tradable CPI & sectoral factor model) advanced to fresh all-time highs.

  • NZD weakness spilled over into its Antipodean cousin, which struggled to regain poise, even as firmer crude oil prices lent support to CAD and NOK. A rally in AUD/NZD was capped by the psychologically significant NZ$1.1000 figure and the rate pared gains.
  • Participants returned to dumping the yen, which landed at the bottom of the G10 pile. Better risk backdrop sapped strength from the embattled currency, despite continued warnings from Japanese officials.
  • Offshore yuan caught a bid after an in-line yuan fixing from the PBOC, which came on the heels of strong weak bias in yesterday's fixing. Spot USD/CNH bounced later in the session, soaring to fresh multi-month highs.
  • U.S. weekly jobless claims & final EZ CPI will take focus later today, alongside comments from Fed's Powell, ECB's Lagarde and BoE's Bailey & Mann.