The New Zealand Dollar closed the week with its third consecutive week of gains. The currency continued to rally despite dovish comments from the RBNZ Governor Graeme Wheeler, who noted that further rate cuts could be delivered. A rate cut of 0.25% looks to be clearly factored in, and if and when the RBNZ does cut rates again it is unlikely to see the Kiwi weaken much. From a weekly perspective, NZDUSD has cleared the support at 0.6712 and looks poised for a test towards 0.727 to establish resistance as long as prices stay above 0.6712. New Zealand’s quarterly CPI was the main data point which increased 0.3% for the quarter, above estimates but remaining well below the RBNZ’s target rate. There is no fundamental bias to support the rally in the NZDUSD and the price action is more reflective of a short squeeze and the Dollar’s weakness for the moment.
Feeble Inflation is a Global Concern
Weekly Report - 18/10/2015