News Column

NZ Dollar Falls Amid Weak Inflation Data

August 18, 2014

BRUSSELS (Alliance News) - The NZ dollar weakened against the other major currencies after data showed second quarter producer price index for New Zealand came in weaker than expected.

Data from the Statistics New Zealand showed that New Zealand's producer prices declined in the second quarter as diary prices fell.

The currency was also under pressure due to a fall in New Zealand's inflation expectation for the upcoming year.

Survey results from the Reserve Bank of New Zealand showed that the inflation expectations for the upcoming year decreased during the third quarter. The one-year inflation expectation decreased to 1.96%. In the previous quarter, the inflation expectation was at 2.08%. The two-year inflation expectation also dropped to 2.23% in this quarter from 2.36%.

The NZ dollar fell to 6-day lows of 0.8424 against the US dollar, 86.45 against the yen and 1.5848 against the euro, from early highs of 0.8483, 87.00 and 1.5748, respectively. If the kiwi extends its downtrend, it is likely to find support around 0.83 against the greenback, 85.88 against the yen and 1.59 against the euro.

Looking ahead, Japan final leading indicator for June is due at 1:00 am ET.

In the European session, Eurozone current account for June is due to be released.

In the New York session, US consumer prices index and building permits and housing starts-all for July are slated for release.

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Source: Alliance News

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