NZD Moves Higher on Inflation Data

We had two important news events during the course of this morning which helped to bring in some action to the markets which had been dull and pretty much directionless over the last 24 hours. The first piece of data was the NZ Inflation Expectations which came in higher than that of the last quarter and this helped to bring about a pop in the NZD as the market was worried about the economic data and was also worried whether the continuous bad data from NZ would lead to the RBNZ mulling rate cuts anytime soon. These fears were dispelled by the good data and hence the pop in the NZD.

The second piece of data was the rate announcement and the statement of monetary policy from the RBA and as was expected by all analysts, the RBA chose to keep the rates on hold. The policy statement was generally upbeat about the economy and expected the economy to recover in due course of time. This slightly hawkish tone from the RBA helped to prop up the AUD as well and as of this morning, both the NZD and the AUD have had a pretty good time.

As for the rest of the currencies, they have been in a consolidation mode over the last 24 hours as the global fears and risks continue to dominate the markets. While Trump and team keep the USD on tenterhooks, we find that there is a risk of a further split in the Eurozone with some parties lining up for the French elections openly campaigning for France to leave the Euro. With the Brexit fears also adding to the list, we have all the major currencies in USD, Euro and the pound under severe pressure and it has just become a question of which is under more stress rather than any currency being strong enough to rise.
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