The New Zealand dollar fell ahead of second-quarter inflation data which is expected to come in weaker than the Reserve Bank has forecast and giving it little reason to contemplate raising interest rates anytime soon.
The kiwi traded at 73.16 US cents, down from 73.30 cents late yesterday. The trade-weighted index slipped to 77.85 from 77.97.
Economists expect inflation was 0.2 per cent in the three months ended June 30, for an annual rate of 1.9 per cent, according to the median in a poll of 15 economists surveyed by Bloomberg.
That would be below the central bank's projection of inflation of 0.3 per cent in the second quarter for an annual rise of 2.1 per cent. The figures may dispel speculation the RBNZ would be encouraged to hike rates in keeping with central banks such as Canada's.
"We see the data reinforcing the RBNZ's decisively neutral policy stance for some time," said Jason Wong, currency strategist at Bank of New Zealand. "If anything, inflation is tracking below the Bank's projections, given the combination of a stronger NZD and lower oil prices since the May MPS."
