NZ dollar eases on CPI data

The New Zealand dollar fell after lower-than-expected inflation figures were released today, having reached a two-month high of US73c earlier in the morning.

The consumer price index (CPI) rose 0.3 percent in the June quarter, taking the annual rate down to 1.8 percent, but economists expect the Reserve Bank to raise the cash rate again later this month to head off renewed inflation pressures.

The kiwi finished the local trading session at US72.07c, just ahead of its US72.00c level 24 hours earlier, having ranged between US72c and US73c.

ANZ chief currency dealer Murray Hindley said the kiwi dropped 0.70 percentage point on the weaker CPI data, while the euro and Australian dollar lost ground as key Asian sharemarket indices dropped and currency markets awaited United States CPI data tonight.

"Kiwi is closing the week having reached a high just above US73c. We're now back off a cent, but we've still seen pretty strong gains over the course of the week," he said.

Reuters reported that the euro and Australian dollar fell as weaker-than-expected Chinese data added to doubts about the strength of the global recovery.

The Chinese data sparked selling in higher-yielding currencies, with one trader saying low liquidity and short-term speculators taking punts on the euro against the Swiss franc and the Australian dollar against the yen added to the volatility.

The kiwi, having pushed to a nine-month high against the Australian dollar around A82.60c this morning, closed at A82.15c compared with A81.78c at 5pm yesterday.

The New Zealand also slipped against the yen to 62.70 at 5pm from 63.38 at 5pm yesterday and against the euro to 0.5578 from 0.5650.

The trade weighted index eased to 67.72 from 68.08.

- NZPA