The NZD was offered heavily in early Asia after New Zealand CPI missed estimates, thus pushing the AUD/NZD cross to an 8-week high of 1.0730. On its way higher, the pair cut through the 100-DMA Level of 1.0688 and was last seen trading around 1.07 handle.
The New Zealand inflation data for Q2 came-in at CPI 0.0% q/q (expected +0.2%) while year on year arrived at 1.7% vs. 1.9%. The weak inflation print poured cold water on speculation that RBNZ could be the next major central bank to raise rates.
Analysts at Westpac say, “While the RBNZ has already been on the side of arguing that OCR hikes are a long way off, today's result should put a severe dent in market expectations that the RBNZ will be hiking rates by mid-2018."
AUD/NZD Technical Levels
A break above the session high of 1.0730 would open doors for 1.0771 (61.8% Fib R of Mar high - June low) and 1.08 handle. On the downside, 1.0688 (100-DMA) is likely to offer support, which if breached could yield a pullback to 1.0636 (session low) and 1.0629 (5-DMA).
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