Dollar Fails to Impress on CPI Surprise

The quarterly consumer inflation data from New Zealand released earlier today showed an increase of 0.30% for the last quarter. The data beat analyst consensus estimates which expected the consumer prices index to rise 0.20% over the quarter.  On an annualized basis, inflation was up to 0.40% by the end of the third quarter, highlighting the relative successese of monetary policy in stemming the slide in inflation. While the Kiwi dollar initially managed to post some gains, the currency declined as investors start to focus on another prospective cut to the benchmark interest rate from the Reserve Bank of New Zealand largely on account of the exchange rate's appreciation in recent weeks. Analysts expect to see at least one more rate cut from the RBNZ by the end of this year just as the NZDUSD pair is trading near a 15-week high.

The Canadian dollar is poised to post a third straight week of gains against the Greenback but is at risk on today's manufacturing sales numbers. Estimates point to a decline of -0.60% after sales in the manufacturing sector rose 1.70% last month. The Canadian dollar has been tracking prices in crude oil over the past few weeks, gaining on the back of the rebound in energy. The Loonie closed yesterday at 1.2862 but the 4-hour chart is showing signs of a possible rebound which could see USDCAD retrace some of its losses towards the broken support at 1.3050 to establish resistance. Crude oil prices declined after the weekly EIA inventory report showed a larger than expected build up in US commercial stockpiles, which rose 7.6 million barrels against estimates of 2.2 million barrels. WTI fell to lows of $45.45 before recovering to close the day higher at $46.85.