NZ dollar falls

new zealand dollar3The New Zealand dollar has fallen ahead of inflation data in Britain and the United States and the Reserve Bank’s survey of expectations, with little indication there is much pressure on prices worldwide.

The kiwi declined to 72.44 US cents as at 0800 in Wellington from US72.68c late on Monday.

The trade-weighted index fell to 74.52 from 74.72.

Figures on Tuesday may show UK core inflation was 2.6 per cent year-on-year in the first quarter, up from 2.5 per cent previously.

on Wednesday night US data may show core inflation slowed to 1.7 per cent from 1.8 per cent.

The RBNZ’s survey of expectations, out on Wednesday, may also indicate a subdued outlook for inflation after the central bank last week reiterated interest rates are on hold until at least the second half of 2019.

“Offshore events are likely to hold sway with US CPI figures the key event this week,” ANZ Bank New Zealand rural economist Con Williams said.

“That said the RBNZ’s two-year inflation expectations survey tomorrow will also be watched to see if the central bank might need to take more action to move prices along.”

Traders will watch for the Crown accounts on Tuesday for the six months ended December 31 and in Australia, the NAB business conditions survey for January.

Financial markets are more subdued than last week, with the Chicago Board Options Exchange Volatility Index (VIX) retreating to about 26 from a spike to about 40.90 at the end of last week.

The kiwi dollar fell to 52.38 British pence from 52.45 pence late on Monday after Bank of England policymaker Gertjan Vlieghe said a further rise in British interest rates was likely to be needed, adding to hawkish comments from the Bank of England last week.

The kiwi dropped to 92.34 Australian cents from A92.76c on Monday and declined to 58.96 euro cents from 59.15 cents.

It was little changed at 4.5804 yuan from 4.5810 yuan and fell to 78.71 yen from 79.02 yen.

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