FXstreet.com (Barcelona) - A mix of Asian real money and speculative demand helped underpin the NZD on Monday. Technically speaking, according to Mike Jones, Head of Currency Analysts at Bank of New Zealand, sees "the failure of the pair to break convincingly below 0.8145 means we’re back to trading the familiar 0.8145-0.8360 range." However, Mike points at the upcoming event-risk for the currency today, first up is NZ CPI inflation data at 21.45GMT.
From Mr. Jones: "The modest 0.4% quarterly increase we’re picking is softer than the market’s 0.5/0.6%, and would further clip annual CPI inflation to 0.9%, from 1.0% in Q3. An outcome around our expectations would only reinforce the market’s inclination to price in RBNZ rate cuts (a full 25bps cut is now fully priced into the curve), dragging the NZD/USD a little lower. Still, the backward-looking nature of the data may limit market reaction to some extent."
From Mr. Jones: "The modest 0.4% quarterly increase we’re picking is softer than the market’s 0.5/0.6%, and would further clip annual CPI inflation to 0.9%, from 1.0% in Q3. An outcome around our expectations would only reinforce the market’s inclination to price in RBNZ rate cuts (a full 25bps cut is now fully priced into the curve), dragging the NZD/USD a little lower. Still, the backward-looking nature of the data may limit market reaction to some extent."
