KIWI GAINS AFTER STRONG INFLATION NUMBERS
The New Zealand dollar rose against the USD in the Asian session. This was after the New Zealand Bureau of Statistics released CPI numbers for the third quarter. During the quarter, the CPI rose at a QoQ rate of 0.9%, which was higher than the 0.7% that traders were expecting. On an annualized basis, the CPI rose by 1.9%. This was higher than the expected 1.7%. In the first and second quarter, the CPI rose by 1.1% and 1.5% respectively.
The Aussie was little moved against the USD after the RBA released minutes from an important meeting. The minutes showed that the RBA was upbeat about the economy but warned that the loan condition was tightening. This was a response to the country’s biggest banks that have moved to increase interest rates. The bank left interest rates unchanged at 1.5% implying that rates would remain unchanged for longer.
Yesterday, the sterling declined sharply against the USD in the Asian session. It then recovered from these losses. Today, it remained at yesterday’s closing levels as traders await important employment numbers from the UK. Traders expect the average earnings index plus bonus to remain flat at 2.6%. The ex-bonus numbers are also expected to remain flat at 2.9%. The unemployment rate is expected to remain unchanged at 4.0%. The headline employment change number is expected to show an improvement of 11K while the claimant count change is expected to decline to 4.5K.
The EUR/USD was little moved in the Asian session. It is now trading at 1.1575. This price is above the month-to-date low of 1.1575, which the pair traded at on Tuesday last week. It is also along the 14 and 28-day EMA and the 38.2% Fibonacci Retracement level. Today, the pair will likely see some major movements as traders wait for Germany’s economic sentiment number. Upward movements will see it test the 1.1623 resistance level, which is the 50% Fibonacci Retracement level.
The GBP/USD pair is trading at 1.3145. This is slightly lower than yesterday’s high of 1.3180. This is along the 14 and 28-day EMA. It is also along the 61.8% Fibonacci Retracement level and part of the handle of the cup and handle pattern. There is a possibility that the pair will continue moving up as traders wait for the employment numbers and the progress of Brexit talks. If it does, it will likely reach the 1.3180 resistance.
The AUD/USD pair is trading at 0.7127. In the past week, the pair has made some huge swings and traded between 0.7040 and 0.7150. The current price is along the lower line of the Bollinger Band and along the important support shown below. With the RBA minutes out, traders will now shift focus to the USD. Today, the Labor department will release the JOLTS jobs openings numbers which will potentially lead to major movements of the pair.