Baxia Markets
July 15, 2021

Hawkish RBNZ Spikes NZDUSD

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Today we see New Zealand’s CPI release. A highly anticipated release given New Zealand’s recent progress. Set your alarms because this is important.


10:45PM (GMT) - CPI m/m



What is it? 


The Consumer Price Index is released by the New Zealand government and is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. Essentially it attempts to quantify the aggregate price level in an economy and measure the purchasing power of a country's unit of currency. The CPI is a key indicator to measure inflation and changes in purchasing trends. 



What are the Expectations for New Zealand - CPI m/m?


With this release right around the corner, we take a look at what the expectations are for this release and what it means. The expected figure for CPI is 0.7% compared to the previous figure of 0.8%. Not a massive difference between what is projected in July compared to that in April. This is a sign of stable times. Something that is necessary at the moment. 



Professional Insight


A head analyst from FXStreet wrote earlier today, “NZD/USD momentum has flipped to positive, following yesterday’s hawkish surprise from the RBNZ. A test of the month-old range high at 0.7105 looms. If that level broke, we’d be targeting 0.7300 multi-week. It won’t be one-way traffic, though – the USD should find support from a continuing stream of strong data over the next few months.”


Things are looking good for New Zealand given the current circumstances. A strong CPI release could strengthen the NZD to even higher highs. Definitely a highly anticipated release. 



What happens if...


We see a higher number than 0.7%? That is typically a good sign for the US Dollar. However, if the number is way higher than expected, then there could be negative implications. 


What happens if...


We see a lower number than 0.7%? That is typically not a good sign for the US Dollar. We also do not want to see a number that is way lower than 0.7%, especially not in the negatives as we all know deflation is not ideal in the long term. 



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