The New Zealand dollar remained range-bound against the greenback yesterday following the release of weak economic data from both the US and New Zealand. While the New Zealand inflation data for the first quarter missed estimates, the US unemployment claims were higher than anticipated. Overall, the NZD/USD
According to the data published by Statistics New Zealand, the country’s consumer price inflation grew by 1.80% q-o-q in the March 2022 quarter, following an increase of 1.40% in the December 2021 quarter, but missed the 2% rise anticipated by economists.
On a y-o-y basis, the New Zealand inflation surged 6.90% in March 2022 quarter, but missed the 7.10% increase forecast by economists. The reported figure was the highest since 2Q 1990. The increase in prices was led by a 8.60% rise in housing & utilities in 4Q 2022. While food & non-alcoholic beverages posted a growth of 6.70%, recreation & culture recorded a 4.80% y-o-y increase in prices. Also, alcoholic beverages and tobacco posted an increase of 2.90%. Likewise, miscellaneous goods & services reported a rise of 5.60%. On the contrary, transport prices increased at a slower pace of 14.30% y-o-y in March 2022 quarter, compared with a 15% increase in March 2021 quarter.
The data published by the Federal Reserve Bank of Philadelphia indicates that the index for general economic activity fell to 17.60 in April, from 27.40 in the earlier month and missed the reading of 21.50 anticipated by economists. The index for new orders decreased 8 points to 17.80 in April. Also, the current shipments index dropped 11 points to 19.10.
The employment index inched higher to 41.40 in April. However, the average workweek index inched downwards to 20.80, from 21.40 in March. Firms anticipate the cost of raw materials to increase between 10% and 12.50%. Furthermore, the cost of energy and intermediate goods are forecast to rise 7.50% to 10%. The index for future general activity fell 15 points to 8.20, the lowest reading since December 2008.
According to the US Department of Labor, the first-time unemployment claims fell to 184,000 in the week ended April 16, from 186,000 (upwardly revised from 185,000) in the prior week and greater than the jobless claims of 177,000 anticipated by economists. Notably, first-time jobless claims remain near a 53-year low.
The four-week moving average of jobless claims was 177,250, an increase from 172,750 (upwardly amended from 172,250) in the previous week.
The weak economic data from both the US and New Zealand is expected to keep the NZD/USD pair range-bound in the short term.
The historical price chart indicates that the NZD/USD pair is ascending after testing the support at 0.6770. The next resistance is anticipated only near 0.6890. The currency pair is trading above its 50-day moving average, while the RSI indicator’s reading is above 50. Therefore, we are anticipating the currency pair to remain in an uptrend in the short term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
