Speaking on a CNBC interview Wednesday, Federal Reserve Vice Chair
Richard Clarida said “we‘re not there yet” when asked about whether or
not it’s time to start discussing tapering. However, the Vice Chair did
note that he expects the economy to grow rapidly this year and will
continue to evaluate economic data as it comes in.
Mr. Clarida, along with other Fed speakers Wednesday, harped on the
transitory outlook for inflation. However, inflation expectations rose
to multi-year highs, evidenced through the 5- and 10-year breakeven
inflation rate – which measures inflation expectations through the
Treasury constant maturity and inflation-indexed Treasury rates.Speaking
of economic data, New Zealand reported building permits data for March,
showing a 17.9%rise for March compared to last month‘s revised read of
-19.3%, according to the DailyFX Economic Calendar. The New Zealand
Dollar continued its move higher overnight after yesterday’s stellar
jobs report – which showed the Q1 unemployment rate falling to 4.6% --
injected fresh optimism in the Kiwi Dollar. The upbeat building permits
print may extend NZDs strength in the coming days.
The risk-sensitive Australian Dollar is also aiming higher after a
better-than-expected March building permits figure showing a 17.4%
increase on a month-over-month basis. AUD/USD gained nearly half a
percentage point overnight. The RBA statement on monetary policy will be
released later this week, a potentially high-impact event that may
drive direction in the Aussie Dollar.
Still, the most pertinent market event this week concerning market
sentiment, and therefore to the Australian Dollar and New Zealand
Dollar, will be the US non-farm payrolls report, with the DailyFX
Economic Calendar showing a consensus forecast of +978k jobs for April.
Elsewhere, the Bank of Japan (BoJ) will publish its monetary policy
meeting minutes today.
NZD/USD TECHNICAL ANALYSIS
NZD/USD gained near a full percentage point overnight and now appears
to be tracking higher/lower following todays economic data print. The
next obstacle standing ahead of the Kiwi Dollar appears to be the 23.6%
Fibonacci retracement level. Alternatively, a reversal lower would see
prices find possible support at the 38.2% Fib level and then the 20-day
and 100-day Simple Moving Averages (SMA).
