The New Zealand Dollar (NZD) extended declines early week against the US Dollar (USD) to 0.5530 before recovering to 0.5630 Thursday on a broad rally of risk assets. The rebound had all the hallmarks of a “short squeeze” – sellers exiting positions on the view the cross would travel lower. US CPI slowed for the 3rd month running, releasing at 8.2% for September representing the lowest in 7 months compared to August’s 8.2%. Equity markets dropped over 2% on the day before rallying back to close the day up 2-3% across the major indices. Core CPI rose 6.6% from 6.3%, other than vehicle and apparel prices there was little else implying inflation was being beaten. Buyers of USD should consider as we look to be at the top of the long-term bear channel.
The current interbank midrate is: NZDUSD 0.5644
The interbank range this week has been: NZDUSD 0.5512- 0.5657