NZD in the doldrums
|Expect further downside in NZD/USD, as the interest rate differential continues to move negatively, making NZD shorts costly. Speculators are still net long Kiwi (non-commercial position: net long 40% of total open interest) and will unwind position as the currency nosedives. The next key support can be found at 0.7188 (low from 29 March), then 0.7154 (low from 21 March). On the upside, resistance lies around 0.74 (high from mid-April). All in all, a return towards 0.70, or even below, seems reasonable.
Stay on top of the markets with Swissquote’s News & Analysis
The New Zealand dollar saw heavy selling on Friday amidst weak inflation data. The Kiwi fell 0.53% against the greenback and hit $0.7230. Headline inflation eased to 1.1% annually in Q1, down from 1.6% in the previous quarter. After increasing 0.5% in the Q4 last year, tradable inflation contracted 0.40% annually, while non-tradable inflation eased to 2.3%. The relative strength of the Kiwi during that period explains most of the reduction in price pressures. However, the sector factor model, used by the Reserve Bank of New Zealand, shows a brighter picture, holding steady at 1.5%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.