By FXEmpire.com

Analysis and Recommendation: (close of the Asian session)

The NZD/USD jumped against the Australian currency today, after Consumer Price Index data from across the Tasman fell short of expectations and prompted bets of a May interest rate cut.

Australia’s official interest rate is currently 4.25 per cent, compared with New Zealand’s 2.50 per cent.

The kiwi recently traded at 79.13 Australian cents, up from A78.73c just before 1.30pm when official Australian figures showed consumer prices increased 0.1 per cent in the first quarter.

Economists had been expecting an increase of 0.6 per cent, and even more bearish investors such as Westpac were betting on a 0.4 per cent increase.

The result was below New Zealand’s CPI growth of 0.5 per cent in the March quarter versus the previous three months, which remained within the Reserve Bank of New Zealand’s target range.

Today’s data has further fuelled bets that the Reserve Bank of Australia will cut its cash rate when it meets to review monetary policy in May, particularly as it comes after a spate of softer data adding further evidence that the Australian economy is struggling.

Economic Data for April 23 & 24, 2012 actual v. forecast

EUR

French Manufacturing PMI

47.3

47.2

46.7

EUR

German Manufacturing PMI

46.3

49.0

48.4

EUR

Manufacturing PMI

46.0

48.2

47.7

CAD

Wholesale Sales (MoM)

1.6%

-1.0%

-1.1%

Apr. 24

AUD

CPI (QoQ)

0.1%

0.6%

0.0%

AUD

Trimmed Mean CPI (QoQ)

0.3%

0.6%

0.6%

Economic Events scheduled for April 25, 2012 that affect the NZD, AUD, and JPY

13:30 USD Core Durable Goods Orders (MoM) 0.5% 1.8%

Core Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, excluding transportation items. Because aircraft orders are very volatile, the core number gives a better gauge of ordering trends. A higher reading indicates increased manufacturing activity.

13:30 USD Durable Goods Orders (MoM) -1.5% 2.4%

Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items.

17:30 USD Interest Rate Decision

Federal Open Market Committee (FOMC) members vote on where to set the rate. Traders watch interest rate changes closely as short-term interest rates are the primary factor in currency valuation

22:00 NZD Interest Rate Decision 2.50% 2.50%

The Reserve Bank of New Zealand (RBNZ) governor decides where to set the rate after consulting senior bank staff and external advisers. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

Government Bond Auctions (this week)

Apr 25 09:10 Sweden Auctions T-bills

Apr 25 09:30 Germany Eur 3.0bn new Jul 2044 Bund

Apr 25 14:30 Sweden Details nominal bond auction on May 02

Apr 25 17:00 US Auctions 5Y Notes

Apr 26 00:30 Japan Auctions 2Y JGBs

Apr 26 09:10 Italy BOT auction

Apr 26 14:30 Sweden Details I/L bond auction on May 03

Apr 26 17:00 US Auctions 7Y Notes

Apr 27 09:10 Italy BTP/CCTeu auction

Click here a current NZD/USD Chart.

Originally posted here