Housing-related prices were the main upward contributor to the annual rate, up 3.2% on the year. This was offset by transport prices, as prices for fuel and vehicle relicensing fell.
New Zealand's is mandated to keep annual in a 1-3% band, with a focus on the midpoint. It is widely expected to cut rates by 25 basis points to a record low 1.75% on November 10 as remains well below target. However, today’s CPI reading lowers the likelihood of a further cut in 2017.
We got long at 0.7110 yesterday. Daily is biased up, so further gains look likely. The October 14 low acts as a support. Our NZD/USD long target is 0.7290.
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