The New Zealand dollar weakened ahead of a speech by Reserve Bank governor Graeme Wheeler about inflation.
The kiwi slid to 78.17 US cents at 8am in Wellington from 78.49 cents at the New York close and 78.30 on Friday. The trade-weighted index dropped to 78.26 from 78.31 on Friday.
Wheeler is scheduled to speak to a conference in Wellington this morning about "reflections on 25 years of inflation targeting". Economists and businesses have been pulling back their forecasts for inflation after data showed inflation accelerated at a weaker-than-expected 1 percent annual pace in the September quarter, and only just within the Reserve Bank's target band of between 1 percent and 3 percent. Strong inbound migration and a depreciation in the kiwi dollar during that period had been expected to put pressure on consumer prices, and the central bank has been surprised by the lack of inflation in the economy.
"Today will kick off with a speech by RBNZ Governor Wheeler at 8:45am, at the start of a conference on Inflation Targeting," Kymberly Martin, market strategist at Bank of New Zealand, said in a note. "The topic remains very relevant for a bank that has been consistently surprised recently by lowside inflation readings. Look out for any titbits that may leak out from this conference into the public domain."
