Q1 CPI was the source of NZD weakness today
Kiwi dollar drops nearly a percent on weak Q1 inflation; RBNZ rate cut expectations pushed up. In the first three months of 2019, Consumer prices softened than expected, and the annual inflation rate fell below the RBNZ target.
- Quarterly CPI fell to 0.1% vs 0.3% market expectations
- Annual CPI fell to 1.5% vs. RBNZ’s forecast 1.6%
According to Stats NZ, the CPI rose by 0.1 percent in the March 2019 quarter. The annual inflation rate was 1.5 percent, fell to the lower end of the RBNZ’s target range.
The kiwi dollar approached the Q1 CPI data at 0.6775, swiftly plunged nearly 100pips initially on the poor data. NZDUSD has an intraday support finds at 0.6665 below here could retrace further towards 0.6630/0.6600 and even 0.6550 levels in the coming days.
The other cross AUDNZD popped through the 200MA, printed a high at 1.0730 at one point.
As we forecast in our earlier article, the cross AUDNZD has rallied above our first target price 1.0500 in early April, and love to make its way to our final target 1.0800 we set in March.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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