Kiwi helped as CPI tempers bets on RBNZ rate cut

New Zealand Dollar, NZD / USD, New Zealand Inflation, RBNZ – Talking Points

  • Wall Street returns to technology stocks because Nasdaq climbs to a new record
  • APAC trading could see regional indices pull back on Friday, but weekly gains intact
  • New Zealand inflation data further tempers RBNZ rate cut bets, Kiwi reacts to the rise

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Wall Street traders continued to build up in tech stocks on Thursday, propelling the Nasdaq Composite 0.55% into another record close. The Dow Jones and S&P 500 changed little that day. Meanwhile, the Russell 2000 Small Cap Index fell 0.89%, breaking yesterday’s record. the US dollar weakened compared to most major peers.

The yield on 10-year Treasuries rose 13 basis points after several days of decline pushed yields to multi-week lows as the market ignored US labor data and instead focused on rising prices. debt supply outlook. According to DailyFX Economic Calendar. The employment data has investors fearful that the recovery in the US labor market is leveling off.

Nasdaq, Russell 2000, 10 Year Treasury Yield – 30 Min Chart

Russell 2000, Nasdaq, 10-year chart

Chart created with TradingView

Friday’s Asia-Pacific Outlook

Asia-Pacific trading could see the recent risk mood start to worsen this weekend. Hong Kong Hang Seng Index may fall at open, as indicated by futures contracts, with Japan Nikkei 225 index. The pullback follows a bullish week in most APAC markets as investors applauded global developments, primarily hopes for a revival in the United States.

New Zealand economic data is pushing the Kiwi higher after quarterly inflation data beat analysts’ expectations. According to the DailyFX economic calendar, fourth quarter inflation increased 1.4% on an annual basis. The impression of inflation is among the latest signs that New Zealand’s economy is enjoying a solid recovery after the Covid-19 pandemic, which was all but wiped out in the country.

The Kiwi appreciated against most of its major rivals, with bets for further easing from the RBNZ tempered. According to the New Zealand government, the rise in inflation in the fourth quarter was largely attributable to transport, recreation, culture and housing. The West Bank earlier this week adjusted its forecast and now expects the RBNZ to keep its official treasury rate (OCR) at 0.25%.

New Zealand inflation data versus expectations

New Zealand fourth quarter inflation data

New Zealand Dollar Technical Outlook:

the New Zealand dollarThe move higher against the greenback sent NZD /USD back above its psychological level of 0.7200 and the 38.2% Fibonacci retracement of the move from December to January. The move could see more on the upside with the Relative Strength Index (RSI) and MACD Oscillators both giving bullish signals.

An earlier resistance level near 0.7240 may come into play before the 23.6% Fib level is highlighted. On the downside, the psychological level of 0.7200, Fib of 38.2% and the 9-period exponential moving average can probably serve as areas of support. Overall, however, looking at the longer-term trend, the future movement in NZD / USD prices appears skewed towards higher ground.

NZD / USD Four Hour Chart

nzd / usd 4 hour chart

Chart created with TradingView


— Written by Thomas Westwater, Analyst for

Contact Thomas, use the comments section below or @FxWestwateron Twitter


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