Thursday, April 20, 2017 3:04 AM EDT
Prices in New Zealand surged by 1% in Q1 2017, above 0.8% expected and a much slower 0.4% that was reported in Q4 2016. Year over year, we also had a beat of 0.2%: CPI is up 2.2% against 2% expected.
The kiwi did react positively to the news, but it never went very far. NZD/USD reached out to 0.7045 from just under 0.70 ahead of the publication. Looking just a few hours back, the pair had already traded around 0.7050, so this is only a move within the known ranges.
Inflation figures drive the decisions of the central bank regarding interest rates. And, New Zealand publishes its inflation figures only once per quarter, making the rise more impactful.
So why didn’t the kiwi leap higher?
The devil is in the details, as always. The primary price rises came from more volatile items. Energy prices were on the rise in New Zealand, as they were on the up and up elsewhere.
And prices were driven up (an annual rate of 4%) also on a rise in taxes on tobacco and cigarettes. This was no surprise for economists at the RBNZ and elsewhere.
So, core CPI is only up 1.5% year over year, lower than the rises in the US.
NZD/USD levels
At 0.7040, the kiwi is flirting with a level that worked as resistance. A further cap awaits at 0.7090 and 0.7150. Support is at 0.6950 and 0.6880.
Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and the trader's level of experience should be carefully weighed before entering the Forex market. There is always a possibility of losing some or all of your initial investment / deposit, so you should not invest money which you cannot afford to lose. The high risk that is involved with currency trading must be known to you. Please ask for advice from an independent financial advisor before entering this market. Any comments made on Forex Crunch or on other sites that have received permission to republish the content originating on Forex Crunch reflect the opinions of the individual authors and do not necessarily represent the opinions of any of Forex Crunch's authorized authors. Forex Crunch has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: Omissions and errors may occur. Any news, analysis, opinion, price quote or any other information contained on Forex Crunch and permitted re-published content should be taken as general market commentary. This is by no means investment advice. Forex Crunch will not accept liability for any damage, loss, including without limitation to, any profit or loss, which may either arise directly or indirectly from use of such information.
less
How did you like this article? Let us know so we can better customize your reading experience.