New Zealand Dollar Fragile After Disappointing CPI

The New Zealand dollar managed to eke out some gains against its US counterpart and the euro today following yesterday’s big drop. The currency remained extremely fragile, though, and continued to fall against the Japanese yen.

New Zealand’s Consumer Price Index dropped 0.2 percent in the fourth quarter of 2014 even though forecasters promised no change. The reading was also noticeably worse the the previous quarter’s increase by 0.3 percent. The NZ dollar sank after the report.

Poor domestic data was not the only reason for the New Zealand currency to fall. The general market sentiment also did not play in favor of the kiwi. With traders seeking safety, riskier growth-related currencies had limited demand.

NZD/USD edged up to 0.7648 as of 3:35 GMT today following the drop from 0.7776 to 0.7633 (1.8 percent) during the previous trading session. EUR/NZD dipped to 1.5097 following the rally from 1.4902 to 1.5108 (1.4 percent). NZD/JPY declined from 90.65 to 90.37.

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