GBP Bounces on CPI, NZD Down after RBNZ
New Zealand Dollar falls broadly today as the markets considered the RBNZ rate hike as a dovish one, probably with interest rate already peaked. The development also takes Aussie lower too. Meanwhile, Sterling is attempting a bounce after strong core CPI reading, as well as services prices. But buyers of the Pound appear to be hesitating for now. Euro is also slightly firmer but there is no apparent momentum except versus commodity currencies. Dollar and Yen are mixed, awaiting further guidance from overall risk sentiment.
Technically, one focus for the rest of the day would be on whether Sterling could extend its rebound attempt. EUR/GBP has already breached 0.8660 temporary low too, and it’s on track to resume the decline from 0.8977. Levels to watch include 1.2483 minor resistance in GBP/USD, and 172.60 temporary top in GBP/JPY. Break of these levels would mark a stronger come back in the Pound.
In Asia, Nikkei closed down -0.89%. Hong Kong HSI is down -1.17%. China Shanghai SSE is down -0.89%. Singapore Strait Times is down -0.30%. Japan 10-year JGB yield is up 0.0089 at 0.413. Overnight, DOW dropped -0.69%. S&P 500 dropped -1.12%. NASDAQ drooped -1.26%.
UK CPI slowed to 8.7%, CPI core rose to highest since 1992
UK CPI slowed from 10.1% yoy to 8.7% yoy in April, above expectation of 8.2% yoy. On a monthly basis, CPI rose by 1.2% mom, above expectation of 0.8% mom.
CPI core (excluding energy, food, alcohol and tobacco) rose from 6.2% yoy to 6.8% yoy, above expectation of 6.2% yoy. That’s the highest level since March 1992.
CPI goods annual rate eased from 12.8% yoy to 10.0% yoy, while the CPI services annual rate rose from 6.6% yoy to 6.9% yoy.
NZD/USD dives after dovish RBNZ hike
RBNZ raised OCR by 25bps to 5.50% today, reaching the projected peak interest rate. The decision was made by a 5-2 vote, with two committee members voted for no change. The central bank noted that “The OCR will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1% to 3% annual target range, while supporting maximum sustainable employment.”
The overall announce was seen as being dovish by the markets, sending New Zealand Dollar broadly lower. NZD/USD’s break of 0.6181 support confirms resumption of the decline from 0.6383 for retesting 0.6083/0.6110 support zone.
More importantly, the development is inline with the view that corrective pattern from 0.6083 has completed with three waves up to 0.6383. That is, the decline from 0.6537 might be ready to resume too. Firm break of 0.6083 will target 100% projection of 0.6537 to 0.6083 from 0.6383 at 0.5929.
https://passmypropfirms.xyz
FTMO 200K Challenge (Passed) All Time Return:
10.3%