NZD/USD – Kiwi Steady, NZ Consumer Inflation Report Next

NZD/USD has posted small gains on Tuesday, as the pair trades at 0.6840 in the North American session. In the US, there are no major events on the schedule. The NFIB Small Business Index beat expectations, while Import Prices missed the estimate. New Zealand will release an important inflation report, the Food Price Index. On Wednesday, the markets will have some key data to work with, as the US releases Core Retail Sales, Retail Sales and PPI.

Later on Tuesday, New Zealand releases the Food Price Index. The indicator helps analysts track inflation, as CPI, the primary consumer inflation indicator, is released on a quarterly basis. FPI is pointing to weak inflation levels, as the index has posted six declines in the past seven readings. Will the index return to positive territory in the March report? We’ll get a look at CPI next week. The fourth quarter reading did not impress, with a decline of 0.5%, its worst reading since 2009.

The Federal Reserve has been in the spotlight in recent weeks, as hawkish statements from several Fed members had raised expectations about a rate hike in April. However, Fed chair Janet Yellen responded with a dovish assessment of the US economy, dampening such speculation. Last week, Yellen acknowledged that although domestic growth was steady, the US economy remained prone to risks due to turbulent conditions in the global economy. New York Federal Reserve president William Dudley reiterated Yellen’s message, saying that the Fed must approach future rate hikes with caution. As well, the Fed released the minutes of its March policy meeting last week, and the tone was more dovish than expected, although some members did express support for an April hike. The minutes also pointed to a split as to whether the recent pickup in inflation will continue. Higher inflation levels would increase the likelihood of a rate hike in June. Most analysts are expecting no more than two rate hikes in 2016, although stronger than expected economic data could change this forecast.

NZD/USD Fundamentals

Tuesday (April 12)

  • 6:00 US NFIB Small Business Index. Estimate 93.9. Actual 92.6
  • 8:30 US Import Prices. Estimate 1.0%. Actual 0.2%
  • 14:00 US Federal Budget Balance. Estimate -106.5B
  • 18:45 New Zealand Food Price Index

Upcoming Key Events

Wednesday (April 13)

  • 8:30 US Core Retail Sales. Estimate 0.4%
  • 8:30 US PPI. Estimate 0.3%
  • 8:30 US Retail Sales. Estimate 0.1%

*Key releases are highlighted in bold

*All release times are DST

NZD/USD for Tuesday, April 12, 2016

NZD/USD April 12 at 10:15 DST

Open: 0.6857 Low: 0.6852 High: 0.6926 Close: 0.6883

NZD/USD Technical

S3 S2 S1 R1 R2 R3
0.6449 0.6605 0.6738 0.6897 0.7011 0.7100
  • NZD/USD posted slight gains in the Asian and European sessions. The pair has reversed directions in the North American session
  • 0.6897 was tested earlier in resistance and is under pressure
  • 0.6738 is providing strong support

Further levels in both directions:

  • Below: 0.6738, 0.6605 and 0.6449
  • Above: 0.6897, 0.7011, 0.7100 and 0.7231
  • Current Range: 0.6738 to 0.6897

OANDA’s Open Positions Ratio

The NZD/USD ratio is showing little movement, consistent with a lack of significant movement from NZD/USD. Long positions have a strong majority (61%), indicative of trader bias towards NZD/USD continuing to move to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.