- NZD/USD briefly pushed back above 0.6800 in wake of not as high as feared US inflation figures.
- Analysts said the market had been positioning itself for an upside surprise, hence the unwind of bullish dollar bets.
NZD/USD has been choppy in recent trade, rebounding from close to session lows around 0.6780 to momentarily back above 0.6800 in wake of a bad as feared increase in US Consumer Price Inflation in November. The pair has since dropped back to around the 0.6790 level, where it trades broadly flat on the day after failing to push above Asia Pacific session highs at 0.6806.
The move higher was a result of dollar weakness following the broadly as expected Consumer Price Inflation (CPI) figures, which saw the YoY rate of CPI hit near four-decade highs at 6.8%. Analysts noted that markets had appeared to be positioning themselves for an upside surprise in the run-up to the data, with some citing comments from US President Joe Biden on inflation on Thursday as hinting towards a higher-than-expected inflation reading. To recap, Biden commented on Thursday that some of the recent declines in energy prices would not have fed into the CPI yet - some saw this as him attempting to pre-emptively playdown fears about higher-than-expected inflation.
Thus, with inflation broadly failing to beat expectations, that was enough to see an unwind of bullish dollar bets. The Fed is still likely to view this data with extreme disappointment, however, and it will strengthen the hand of the more hawkish FOMC members pushing for faster monetary policy normalisation.
Back to the kiwi; again lags its fellow non-USD dollar peers (AUD and CAD) which could be a reflection of a significant slowdown in Manufacturing PMI to 50.6 in November from 54.3 the month prior. But alternative NZ data released on Friday was positive, with spending on electronic cards up 9.6% in November, suggesting consumption will drive a strong economic rebound in Q4. Ahead, NZD/USD traders should keep an eye on an eye on the release of the preliminary US University of Michigan Consumer Sentiment survey which is out at 1500GMT.
Otherwise, traders should watch the latest headlines on Omicron for further information on 1) transmissibility (seems very high), 2) vaccine effectiveness (still not clear, but they still seem somewhat effective) and 3) severity (illness associated with Omicron infection seems very mild versus delta).
|Today last price||0.6791|
|Today Daily Change||-0.0004|
|Today Daily Change %||-0.06|
|Today daily open||0.6795|
|Previous Daily High||0.6824|
|Previous Daily Low||0.678|
|Previous Weekly High||0.6868|
|Previous Weekly Low||0.6741|
|Previous Monthly High||0.7199|
|Previous Monthly Low||0.6773|
|Daily Fibonacci 38.2%||0.6796|
|Daily Fibonacci 61.8%||0.6807|
|Daily Pivot Point S1||0.6775|
|Daily Pivot Point S2||0.6755|
|Daily Pivot Point S3||0.673|
|Daily Pivot Point R1||0.6819|
|Daily Pivot Point R2||0.6844|
|Daily Pivot Point R3||0.6864|
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.