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Kiwi Lower Ahead of Inflation Data

Published October 16, 2019

The Kiwi Dollar has drifted lower overnight as global growth concerns weighed on market sentiment. Optimism earlier in the week around U.S – China trade negotiations has diminished, with doubts around how much progress has actually been made. Meanwhile, last night’s Global Dairy Auction was close to expectations and had little impact on the NZD. Attention now turns to this morning’s NZ inflation data.

All Eyes on CPI Data

The big event for the Kiwi Dollar today is the release of NZ Q3 CPI data. Markets are expecting inflation to slow to 1.4%, compared to 1.7% in Q2. The numbers are due at 10.45am this morning, and any result outside of market expectations should see more volatility in the NZD.

GBP Higher on Brexit Developments

Continued Brexit optimism sent the GBP higher once again, with comments overnight from the EU’s chief negotiator Barnier that a deal may be done this week. Both sides appear to be pushing for a quick deal, however uncertainty remains with Germany warning that Brexit will still need to be delayed until next year even if a deal is agreed shortly. Expect the GBP to remain volatile in the coming days. The higher GBP ad weaker NZD has seen the NZD/GBP cross rate take another tumble to a fresh 12 month low.
Looking ahead, some big data due out tonight with U.S retail sales for September, and then tomorrow afternoon we have the closely watched Australian Employment numbers.