The New Zealand dollar dropped against its US counterpart today as consumer prices unexpectedly fell last quarter in New Zealand, adding incentive for the central bank to keep borrowing costs low.
New Zealand’s Consumer Price Index retreated 0.2 percent in the fourth quarter of 2012, following the increase by 0.3 percent in the previous three months. Analysts were unpleasantly surprised as they had expected an increase by 0.1 percent. The Reserve Bank of New Zealand was maintaining the main interest rate at 2.5 percent since March 2011 and it is likely to keep doing that in the future as the nation’s economy still looks weak.
NZD/USD fell from 0.8358 to 0.8343 as of 9:20 GMT today following the advance to 0.8379. NZD/JPY declined from 75.10 to 74.89.
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