Forex - NZD/USD down, but above rarely seen 85 cents level

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Investing.com - USD/JPY is not the only dollar-related pair hovering near a lofty, rarely seen level. The New Zealand dollar is trading slightly lower against its U.S. rival during Wednesday's Asian session, but is still above the 85 cents mark, a level rarely seen for the kiwi against the greenback.

In Asian trading Wednesday, NZD/USD fell 0.01% to 0.8527. The pair was likely to find support at 0.8434, the low of February 15 and has topped resistance at 0.8520, the high of February 15. The kiwi gained some steam on Tuesday following some decent economic data.

In a report, the New Zealand Institute of Economic Research said its index of business confidence rose to 23 in the first quarter from a reading of 20 in the previous quarter.

The kiwi also caught a bid after official data showed that the annual rate of Chinese consumer inflation eased to 2.1% in March from 3.2% in February and below forecasts for 2.4%.

Earlier this week, Reserve Bank deputy governor Grant Spencer said if home prices and credit expansion start to have the appearance of fueling a possible consumption bubble and inflationary pressures become evident, a response from the central bank could be in the cards.

Low interest rates have helped New Zealand property values soar 8% in the past year. New Zealand's benchmark interest rate is 2.5%, low by the country's standards, but still one of the highest in the developed world. RBNZ has previously indicated it will leave rates on hold this year with in the anticipation of some adjustment in the first quarter of 2014 when most traders are expecting a rate hike.

Well NZD/USD previously traversed 85 just two months, today's go round with that level is just the third time in three decades the kiwi has traded that high.

Elsewhere, AUD/NZD is down 0.07% at 1.2297 while NZD/JPY is hovering near five-year highs up 0.02% at 84.44.


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