The NZD/USD has pulled back ahead of the US Consumer Inflation Data. It has recently dropped to 0.7227 which is nearly 1% lower than the highest level this month.
US Inflation Data
The Consumer Price Data will be reported on Wednesday. It is expected to show the biggest rise in over a decade. Economists are anticipating a 3.6% high in the Consumer Price Index on a year-on-year core since 2011. The upsurge in the US CPI has been brought about by the low prices in the previous year due to the Corona virus pandemic.
According to Dow Jones, the CPI is anticipated to rise by 0.2% month over month which would mean a 2.6% rise year on year. This will be a huge push for the NZD/USD pair.
NZ Economic Growth
The New Zealand Economic growth has also played a key role in the current CPI numbers. NZ Economy is growing at very high rates.
What has caused the growth?
- Rise in retail sales
Retail sales have been at its highest in April 2021. The retail card spending in April rose to $6.1 billion which is 4% higher compared to March,2021. Spending was also up in other retail industries apart from the motor industries. The total card spending increased to 117% between April 2020 and April 2021.
- Growth in consent for new homes
The monthly number of new homes consented in March 2021, hit an all-time high of 4,128. This far surpassed the October 1973 figures which were at 4,081. The high record figures indicate that there is a huge amount of residential work in the pipeline.
- Nosedive in unemployment rate
The unemployment rate for men and women pulled back to 4.7% and 5.3% respectively in March 2021. Despite not recovering from the Corona virus effects. The labor market has recorded some gains. This has played a key role in the efforts to stabilize their economy.
Support and resistance
Support: 0.7200 and 0.7150
Resistance: 0.7300 and 0.7350