The New Zealand Consumer Price Index (CPI) has been released for the third quarter and markets were hoping for some fresh direction for the NZD from it.
Kiwi is offered on the miss of expectations.
The data has arrived as follows:
New Zealand CPI (QoQ) Q3: 0.7% (exp 0.9%; prev -0.5%)
CPI (YoY) Q3: 1.4% (exp 1.7%; prev 1.5%).
The quarterly result was below the RBNZ’s forecast of 1.1%.
''However, it was consistent with the RBNZ’s existing stance that the risks to its inflation outlook all lie to the downside, and that extraordinary monetary policy support will be needed for a long time,'' analysts at Westpac argued.
The chart was bullish while above structure ahead of the data as follows:
Kiwi was pushing up against resistance into the data by the 0.6675/90 levels.
''Technically, a sustained break above that level puts a move to the September high of 0.6798 into play, and then it’s pretty much blue sky above that,'' analysts at ANZ Bank explained.
''The NZD has done well on crosses, with the USD DXY firming a touch.''
After the data, the price dropped to a low of 0.6660 but holds in positive territory.
Meanwhile, the analysts at Westpac explained that they ''continue to expect the RBNZ to announce a Funding for Lending Programme for banks, aimed at driving interest rates even lower, at next month’s Monetary Policy Statement.''
Consumer Price Index released by the Statistics New Zealand is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of NZD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative
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