AUD/NZD renews five-week low around 1.1100 on strong New Zealand Inflation, RBA Minutes eyed

AUD/NZD remains pressured at five-week low after the firmer NZ data.

New Zealand Q3 CPI rose 2.2% versus 1.6% expected and 1.7% prior.

Risk-on mood defend buyers even as firmer NZ inflation teases bears.

RBA Minutes will be important due to the surprise 0.25% rate hike.

AUD/NZD takes offers to renew a five-week low around 1.1135 after New Zealand Statistics released the quarterly Consumer Price Index (CPI) data early Tuesday morning in Asia. In doing so, the cross-currency pair fails to justify the market’s risk-on mood ahead of the key Reserve Bank of Australia (RBA) Meeting Minutes.

New Zealand’s third quarter (Q3) CPI rose to 2.2% compared to the 1.6% market forecast and 1.7% prior. The details also mentioned that the YoY CPI increased to 7.2% versus the 6.6% expected and 7.3% prior.

The jump in the inflation data ignored the easing in the oil prices during the Q3, which in turn allows the Reserve Bank of New Zealand (RBNZ) hawks to keep the reins and propel the New Zealand dollar (NZD).

It should be noted, however, that the week-start risk-on mood challenges the pair’s downside, together with the cautious mood ahead of the RBA Minutes.

To state the catalysts, optimism that Jeremy Hunt will safeguard the UK economy and China will be able to overcome the recession woes seemed to have favored the market’s relief the previous day. On the same line could be the softer NY Empire State Manufacturing Index for October, down to -9.5 versus -4.0 expected and -1.5 prior.

That said, the AUD/NZD should wait for the RBA Minutes for fresh clues to the policymakers’ latest decision to surprise the markets by only a 0.25% rate hike. Should the update appear dovish, the quote has more to lose.

Technical analysis

AUD/NZD bears attack the 100-DMA key support, near 1.1420 by the press time, a break of which will direct prices towards 1.1115.