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Forex - NZD/USD drops on downbeat N.Z. reports

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Investing.com -

Investing.com - The New Zealand dollar dropped against its U.S. counterpart on Tuesday, after the release of downbeat producer price inflation data and lower than expected inflation expectations from New Zealand.

NZD/USD hit 0.8426 during late Asian trade, the pair's lowest since August 13; the pair subsequently consolidated at 0.8440, retreating 0.42%.

The pair was likely to find support at 0.8409, the low of August 12 and resistance at 0.8501, Monday's high.

Statistics New Zealand earlier reported that producer price inflation input declined by 1.0% in the last quarter, confounding expectations for a 0.7% gain, after an increase of 1.0% in the three months to April.

In a separate report, the Reserve Bank of New Zealand said that its annual inflation expectations for the next two years ticked down to 2.2% in the second quarter, from a previous estimate of 2.4% in the first quarter.

Meanwhile, the greenback remained supported after a report on Monday showed that U.S. home builder sentiment rose unexpectedly in August, signalling underlying strength in the housing market.

The NAHB/Wells Fargo Housing Market index hit a seven-month high of 55, compared to expectations of an unchanged reading.

The kiwi was also lower against the Australian dollar, with AUD/NZD gaining 0.46% to 1.1050.

Also Tuesday, in the minutes of its August policy meeting, the Reserve Bank of Australia said that the nation's economic outlook remains uncertain and reiterated that interest rates are set to remain on hold.

The central bank added that "GDP growth was likely to have slowed to a more moderate pace in the June quarter."

Later in the day, the U.S. was to release reports on building permits, housing starts and consumer inflation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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