NZ Dollar Falls On Cooler-than-anticipated Inflation Data

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Thursday, following the release of lower-than-expected New Zealand CPI data for the first quarter of 2023.

Data from Statistics New Zealand showed that consumer prices in New Zealand were up a seasonally adjusted 1.2 percent on quarter in the first quarter of 2023. But that was shy of expectations for an increase of 1.7 percent and down from 1.4 percent in the three months prior.

On an annualized basis, inflation climbed 6.7 percent, but below forecasts for 7.1 percent and down from 7.2 percent in the previous three months.

Investor sentiment weighed on expectations of more interest-rate hikes pushed up the U.S. dollar and yields.

Federal Reserve Bank of New York President John Williams said Wednesday that inflation is still at problematic levels and the U.S. central bank will act to lower it. Traders expect a 25-bps rate hike from the Fed next month.

The New Zealand dollar held steady against its major rivals on Wednesday.

In the Asian trading today, the NZ dollar fell to 1.7806 against the euro for the first time since 22nd October 2020. At yesterday's close, the kiwi was trading at 1.7659 against the euro. The kiwi is likely to find its support around the 1.80 mark.

The kiwi slipped to a 3-day low of 82.90 against the yen from yesterday's closing of 83.53. On the downside, the kiwi may find its support level around the 79.00 area against the yen.

Against the U.S. and Australian dollars, the kiwi slipped to nearly a 5-week low of 0.6152 and a 1-1/2-month low of 1.0890 from yesterday's closing quotes of 0.6199 and 1.0824, respectively. If the kiwi extends its downtrend, it may find support around 0.60 against the greenback and 1.10 against the aussie.

Looking ahead, German PPI for March is due to be released at 2:00 am ET.

Eurozone trade balance data for February is slated for release at 5:00 am ET.

At 7:30 am ET. ECB monetary policy meeting accounts is set to be released.

In the New York session, U.S. weekly jobless claims data, U.S. Philadelphia Fed manufacturing index for April, Eurozone flash consumer confidence for April, U.S. leading index, and existing home sales data for March are due.

At 3:00 pm ET, Federal Reserve Board Governor Michelle Bowman is scheduled to speak on "Considerations for a Central Bank Digital Currency" before a Psaros Center for Financial Markets and Policy event, in Washington, U.S.