When is NZ CPI and how might it affect NZD/USD?

Tuesday’s Asian session begins with the quarterly release of New Zealand CPI at 21:45 GMT. Considering the recent comments from the RBNZ’s Governor Orr and the central bank's bearish bias, today’s Q2 2019 consumer price index (CPI) continues to be the key catalyst for the NZD/USD pair. Markets consensus favors an increase to 1.7% from 1.5% in the YoY number versus a rise to 0.6% from 0.1% in the quarterly inflation figure.

Analysts at Westpac join the broad expectations of a 0.6% rise in the inflation gauge to roll out on a quarterly basis which in turn results in an increase in YoY figure to 1.7% from 1.5%. Westpac also expects OCR cut in August:

“Higher fuel prices account for about half of the expected increase for the quarter. We expect measures of underlying inflation to hold steady. A new method for measuring rents will lead to a small lift in the overall inflation rate from here on. Our forecast is in line with the Reserve Bank’s view, and would not stand in the way of a further OCR cut in August.”

TD Securities also joins the flow as they say:

“We forecast Q2 inflation to rise by 0.5% in the June qtr lifting annual inflation to 1.6%. This is a touch below the RBNZ's 0.6% q/q forecast. While higher oil prices in the qtr account for more than 60% of the increase in consumer prices, food prices, at 20% of the basket, impart a mild downside bias. A print in line with RBNZ forecasts keeps an Aug rate cut in play.”

How could the data affect NZD/USD?

Not only recently easing tensions at the US-China trade front and renewed risk-on but the dovish verdict from the RBNZ signaling possibilities that downbeat data have already been factored also increases the market impact of an upbeat figure. The soft inflation pressure, meanwhile, may support the present market consensus of an OCR cut in August by the Reserve Bank of New Zealand (RBNZ) and can trigger the NZD/USD pullback.

On a technical side, sustained trading beyond 0.6730 becomes necessary for the pair to extend its latest run-up towards the mid-April high of 0.6784. However, a downside break beneath 200-day exponential moving average (EMA) level of 0.6714 can drag prices back to early June tops surrounding 0.6680 and then in the direction to 0.6655 rest-point.

Key Notes:

NZD/USD technical analysis: Bulls trying to seize control above 200-DMA/50% Fibo. confluence region

About NZ CPI:

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 purchase 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.

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD at one-week highs above 1.0850

The EUR/USD pair extends its recovery to its highest in over a week as fears took over. Dollar hit in the US session by plummeting equities and government bond yields.


GBP/USD recaptures 1.29 amid virus-related USD weakness

GBP/USD has recaptured 1.29 as coronavirus headlines push US yields and the dollar lower. The EU and the UK prepare for formal post-Brexit due to talks kicking off next week. 


Crypto market consolidates prices while crushing traders' emotions

Top 3 prices remain in range and contradict indicators pointing south. Mild "fear" sentiment is inconsistent with prices in the upper range of the upward movement. XRP may be the surprise of the week and bounce upwards for technical reasons.

Read more

Gold may top $1,800 as coronavirus in Italy propels market panic

The news from Italy has taken coronavirus fears to the next worrying level of a global pandemic, potentially triggering significant stock market sell-offs, sending Gold above $1,800...

Read more

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info