New Zealand Dollar Mute As Kiwi CPI Data Meets Expectations

By Eric Andersen,

THETAKEAWAY : 1Q Consumer Prices Rose0.5% s ince 4Q 2011 >Traders Unfazed on News ofExpected Figure > NZDSD TradedSideways

Data released by Statistics New Zealand showed that the country’s consumer pricesincreased 0.5 percent since the previous quarter and 1.6 percentsince the same time last year. Previously, the Consumer Price Index(CPI) fell by 0.3 percent during 4Q 2011 while the yearly (YoY)figure gained 1.8 percent.

Analysts expected a 0.5 percent rise for the quarter (QoQ) and a1.6 percent rise YoY. In face of a decreasingly hawkish ReserveBank of New Zealand (RBNZ), traders were looking to see how thisquarter’s CPI data would affect the likelihoodof the central bank cutting rates next week. A higher-than-expected CPI woulddiminish odds of an interest rate hike while data falling short ofexpectations would enhance those odds. Prior to the report’srelease, markets expected a 4.0 percent probability that the RBNZwould cut its key interest rate by 25 basis points.

Since the price figure met expectations, unfazed traders maintained their Kiwi positions. In the moments following the data release, NZDUSD initially fell from 0.8159 to .8151, but quickly regained those losses and continued trading sideways.
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/04/18/New_Zealand_Dollar_Mute_as_Kiwi_CPI_Data_Meets_Expectations.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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