NZ Dollar Rises As Asian Markets Rally Amid U.S. Inflation Data

(RTTNews) - The New Zealand dollar strengthened against other major currencies in the Asian session on Wednesday amid risk appetite, as new data showed U.S. inflation is on a firm downward trajectory, boosting bets the Federal Reserve will forgo any more interest rate hikes and indeed start cutting rates in coming months.

Data from the Labor Department showed on Tuesday that inflation slowed to 3.2 percent in October from 3.7 percent in September. Economists had expected the pace of growth to decelerate to 3.3 percent.

On a monthly basis, the CPI was flat in October after climbing by 0.4 percent in September. Economists had expected consumer prices to inch up by 0.1 percent.

Also, the sharp decline in the U.S. dollar boosted commodity prices.

The NZ dollar started rising against the U.S. dollar, the yen and the euro from Monday. Against the Australian dollar, the kiwi started to gain from yesterday.

In the Asian trading now, the NZ dollar rose to an 8-1/2-year high of 90.72 against the yen and nearly a 5-week high of 0.6023 against the U.S. dollar, from yesterday's closing quotes of 90.35 and 0.6004, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 92.00 against the yen and 0.61 against the greenback.

Against the euro and the Australian dollar, the kiwi advanced to a 6-day high of 1.8064 and a 2-day high of 1.0798 from yesterday's closing quotes of 1.8117 and 1.0823, respectively. The kiwi may test resistance near 1.78 against the euro and 1.06 against the aussie.

Looking ahead, German wholesale prices for October and U.K. inflation data for October are due to be released in the pre-European session.

In the European session, Eurozone trade balance report and industrial production, both for September are slated for release.

At 3:00 am ET, Governing Council of the ECB holds non-monetary policy meeting in Frankfurt, Germany.

In the New York session, U.S. MBA mortgage approvals data, Canada manufacturing and wholesale sales data for September, U.S. PPI and retail sales, both for October, U.S. New York Empire State manufacturing index for November, U.S. business and retail inventories data for September and U.S. EIA weekly crude oil inventories data are set to be published.