NZD/USD firmed-up through 0.60 level dollar weakness, NZ CPI next in view
|- The antipodeans were able to recover some ground on dollar weakness.
- NZD/USD holds in the 0.60 handle ahead of CPI data.
NZD/USD traders will be looking to the NZ Consumer Price Index today following a period of range trading into the close last week where the price continues to range-trade around 0.6000. The US dollar was a major contributor to the commodity-FX's downfall last week although as it eased off, the antipodeans were able to recover some ground.
US President Donald Trump’s desire to unlock the US economy helped to boost risk sentiment along with the positive news that surrounded the tests for possible treatments to COVID-19. Equity markets strengthened into the close with the Dow Jones up 3.0% and the S&P500 2.7% higher and commodity-FX responded in kind, with the bird ending the day +1%.
COVID-19 update
Meanwhile, COVID-19 cases continue to climb especially in the US which has now toppled 750,000 cases:
In New Zealand, nine new cases of COVID-19, four confirmed and five probable, were identified in New Zealand on Sunday. The nation's death toll has risen to 12, after confirmation that an Invercargill man who died more than a week ago, was suffering from the virus. However, while the total number of confirmed and probable cases in New Zealand is now at 1431, 912 people have recovered from the virus while more than 4000 tests were processed in laboratories on Saturday.
NZ Q1 CPI preview
Analysts at ANZ Bank expect that the Consumer Price Index lifted 0.5% QoQ, with annual inflation accelerating 0.3% pts to 2.2%. Non-tradable inflation of 1.0% q/q will be just enough to see the annual number hold on to its 3 handle – for now. Tradable inflation is flattered by 2019’s weak Q1 read dropping out of the calculation, but weak petrol prices loom in Q2. In today’s context, what inflation did in Q1 is hardly relevant for monetary policy settings. The RBNZ has already thrown the kitchen sink at it, but even more will be needed. We see RBNZ QE roughly doubling to around NZD60bn."
NZD/USD levels
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