RBNZ’s deputy governor: Lower rates may still be needed to achieve objectives

• Reserve Bank of New Zealand’s Deputy Governor pours cold water over CPI beat.  
• NZD/USD drops back below he 0.63 handle and key support of moving averages.  

Reserve Bank of New Zealand’s Deputy Governor has said that lower rates may still be needed to achieve objectives and sees lower interest rates being here for some time. The Deputy Governor said that lower rates still may be needed to achieve the nation’s  inflation and maximum sustainable employment objectives. These comments follow the Consumer Price Index data released slightly earlier whereby NZD/USD rallied over 30 pips on better than expected data as follows:

• 0.7% vs 0.6% expected and previous QoQ/ Q3.
• 1.5% vs 1.4% expected 1.7% and previous YoY/Q3.

FX  implications:

The bird has fallen back below the 0.63 handle as markets continue to expect additional rate cuts from the RBNZ. The price is below the 200 4-hour moving average again and unable to topple the 200-4hr moving average nor recent trendline resistance – The overall picture remains bearish.