Kiwi Falls On Weak New Zealand Q3 CPI Data

00:10, 23rd October 2014

(RTTNews) - The NZ dollar weakened against the other major currencies in the Asian session on Thursday after data showed that consumer prices in New Zealand rose by less than expected in the third quarter of 2014.

Data from the Statistics New Zealand showed that consumer prices in New Zealand advanced 0.3 percent on quarter in the third quarter of 2014. That was below expectations for an increase of 0.5 percent, although it did mark the third straight quarter at 0.3 percent growth.

On a yearly basis, inflation rose 1.0 percent - shy of forecasts for 1.2 percent and slowing from 1.6 percent in the previous three months.

The NZ dollar showed mixed trading against the major currencies on Wedneday, although it was higher against the other major currencies in the New York session overnight.

On Wednesday, the NZ dollar rose 0.31 percent against the U.S. dollar and 0.21 percent against the yen, While the kiwi fell 0.15 percent against euro and 0.40 percent against the Australian dollar.

The NZ dollar fell to a 2-week low of 1.1179 against the Australian dollar from yesterday's closing quote of 1.1066. If the kiwi extends its downtrend, it is likely to find support around the 1.12 area.

The Australian dollar rose slightly against the other major currencies amid data from HSBC Bank showing that China's manufacturing sector continued to expand in October, with a PMI score of 50.4. Now at a three-month high, the October score is up marginally from 50.2 in September.

Against the yen, the kiwi slipped to a 6-day low of 83.95 from yesterday's closing quote of 84.93. The kiwi may test support near the 83.27 region.

Data from Markit Economics showed that Japan's manufacturing sector expanded at an accelerated pace in October, with a PMI score of 52.8. That follows the reading of 51.7 in September.

The kiwi fell to an 8-day low of 0.7830 against the U.S. dollar and a 6-day low of 1.6136 against the euro, from yesterday's closing quotes of 0.7928 and 1.5939, respectively. On the downside, 0.77 against the greenback and 1.62 against the euro are seen as the next support level for the kiwi.

Looking ahead, PMI reports from major European economies for October are due in the European session.

In the New York session, U.S. weekly jobless claims for the week ended October 11, house price index for August, manufacturing PMI for October and leading indicator for September are due to be released. The Eurozone consumer sentiment index for October is also expected later in the day.

At 10:30 am ET, Bank of Canada Governor Stephen Poloz will testify, along with Senior Deputy Governor Carolyn Wilkins, before the Senate Standing Committee on Banking, Trade, and Commerce, in Ottawa, Canada.