The New Zealand dollar ended the previous week on a mixed note. Can this week’s catalysts inspire one-directional moves?
Quarterly CPI report (Jan 23, 9:45 pm GMT)
- Prices went up by 0.7% in Q3 2019, higher than the 0.6% increase seen in Q2 and what markets had expected
- Inflation is at 1.5% on an annualized basis. It’s lower than Q2’s 1.7% growth but higher than estimates of a 1.4% gain. Turned out, lower transport costs dragged on prices
- NZD spiked higher after the release, but soon traded lower after the RBNZ hinted of lower interest rates
- Analysts see quarterly prices at 0.4%, while annualized readings could improve to 1.8%
Market risk sentiment
- With no major updates expected from the U.S.-China trade negotiations, traders could focus on top-tier reports like U.S., Euro Zone, and U.K.’s PMI releases
- Central bank events like the BOJ, BOC, PBoC, and ECB’s policy decisions can also affect demand for higher-yielding bets
- Oil prices can also take center stage as markets look to political updates in Libya and Iraq for price direction
- AUD/NZD, EUR/NZD, and NZD/CHF are all trading below their short AND long-term EMAs on the daily
- NZD/JPY is trading above its short and long-term EMAs on the daily time frame
- NZD/CAD and NZD/USD are trading above their long-term EMAs but below their short-term EMAs. Watch out for retracement or reversal opportunities
- NZD has been most volatile against JPY, GBP, CHF, and USD in the last 30 days
Missed last week’s price action? Read NZD’s price recap for January 13 – 17!