An Unexpected Surprise From Iran

On Monday, the NZD/USD chart was unusually volatile in the Asian session start. Along with the DOHA meeting failure creating issues across the board, the trend was also impacted by the New Zealand CPI (Consumer Price Index) coming above expectations. Together, these events pushed the pair back, close to the opening gap. The fresh Q1 CPI for New Zealand beat the forecast, posting a 0.2% growth on a quarterly basis versus an expected 0.1% hike and a previous drop of 0.5%. The yearly figure came in line, with +0.4%, while the previous hike was of 0.1%.

Although the result is not close to the RBNZ’s (Reserve Bank of New Zealand) yearly target of 1-3% for this year, it does reduce some of the pressure lingering over the central bank regarding next week’s meeting. This does not imply that the bank will avoid cutting rates again in the coming week.  RBNZ’s Governor, Graeme Wheeler, stated at the last meeting (in Wellington – when the official cash rate was left unchanged at 2.5%) that some policy easing will come shortly to ensure that the average inflation rate will remain steady in the middle of the targeted range.

Yesterday, the NZD/USD managed to keep itself at the same level although the April German ZEW economic survey revealed that the country’s Sentiment indicator went up for the month surpassing expectations and coming at 11.2 versus 8.0. On the other hand, the Current Conditions indicator disappointed, coming at 47.7 versus a forecast of 51.0. The Eurozone’s Sentiment followed the German trend, posting 21.5 versus an initial 8.8 estimate.

The EUR/USD major managed to keep its trend, going up towards a session high of 1.1350 after a new set of poor US data was released. The spot gained further momentum after the US Building Permits and Housing Stats came under for the month of March, meaning $1.086 million and $1.089 million. These figures are coming after an underperformance in the CPI and Retail Sales, supporting the sell-off in the greenback.

The crude figures in the US went up and posted fresh yearly highs, leaving back the losses registered due to the failed meeting in Qatar during the weekend. Iranian officials stated yesterday that the output level can be cut down to pre-sanction levels in an interval of two months, indicating that this OPEC (Organization of Petroleum Exporting Countries) member might be willing to reengage in the talks regarding production freeze in the meeting in June. The WTI (West Texas Intermediate) crude traded yesterday in a broad range: $40.89 per barrel to $42.8 8per barrel, closing the session at $42.38, up $1.19 per barrel or 2.89%.