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Reserve Bank of New Zealand Governor Brehman: The committee believes that inflationary pressures will increase in the future, and the cash rate needs to be raised further.Reserve Bank of New Zealand Governor Brehman: Ive heard that export-oriented businesses are performing well, but are concerned about the uncertain environment.On May 28th, Federal Reserve Governor Lisa Cook stated in a speech at a Stanford University event that inflation is heading in the wrong direction, and she is prepared to raise interest rates if this continues. While Cook indicated she currently favors keeping borrowing costs unchanged and expects price growth to cool again in the coming months, her remarks align with the views of many Fed officials that accelerating inflation is now a greater policy concern than the labor market. Cook stated, "I want to be clear about my risk assessment: the risks still tilt towards higher inflation." Cook indicated that five years of inflation exceeding the Feds 2% target poses a risk that price pressures are embedded in price and wage setting behavior. "Therefore, if the expected process of inflation easing does not materialize in time, I am prepared to raise interest rates," she said.Reserve Bank of New Zealand Governor Brehman: Recognizing that it will take some time to see the impact of higher oil prices on the broader industry.Federal Reserve Governor Cook: It may take a long time to see structural changes in the economy brought about by artificial intelligence.

NZD/USD Price Analysis: Protects NZ Inflation-Induced Support Break; 0.6140 in Sight

Daniel Rogers

Apr 20, 2023 13:51

 NZD:USD.png

 

During the mid-Asian session on Thursday, NZD/USD bears maintain control at the lowest levels in five weeks while defending New Zealand (NZ) losses caused by inflation near 0.6160. This justifies not only the weaker-than-anticipated New Zealand inflation, but also the recent break of one-month-old horizontal support, which is now immediate resistance, as well as the bearish MACD signals.

 

As measured by the Consumer Price Index (CPI), the Reserve Bank of New Zealand (RBNZ) policy purists were unpleasantly surprised by New Zealand's (NZ) first-quarter (Q1) inflation. Despite this, the Quarter-over-Quarter change in the New Zealand Consumer Price Index (CPI) decreases from 1.7% and 1.4%, respectively, to 1.2%.

 

Following the publication of disappointing data, the NZD/USD pair breached a one-month-old horizontal support level, which is now acting as a barrier near 0.6170. The bearish MACD signals are now directing NZD/USD traders toward a horizontal support level that has been in place for 1.5 months and is located near 0.6140.

 

If the NZD/USD bears remain dominant above 0.6140, the 2023 low of 0.6085 cannot be ruled out.

 

The 200-day simple moving average hurdle of 0.6220 becomes crucial for NZD/USD investors to return.

 

If the NZD/USD pair remains above 0.6220, a run up to the previous weekly high around 0.6315 and then to the monthly high of 0.6386 cannot be ruled out.


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