NZD Reverses Rally as Inflation Slows

The New Zealand dollar fell today, following the yesterday’s rally, after the government report showed the inflation slowed more than expected in the third quarter.
New Zealand’s Consumer Price Index rose 0.4 percent in the third quarter of this year. That’s compared to the median forecast of 0.7 percent in the growth by 1.0 percent in the second quarter. That’s bad for the currency as the weakening inflation pressure means reduced need for the central bank to increase the interest rates.
The kiwi is still above the yesterday’s opening level versus the greenback and the yen. The New Zealand dollar was rallying yesterday with other commodity currencies on the positive signs from Europe and China. Yesterday, the Standard and Poor’s 500 Index climbed 1.3 percent, while the Thomson Reuters/Jefferies CRB index of commodities jumped as much as 2.4 percent.
NZD/USD fell from 0.8071 to 0.8054 as of 2:16 GMT today, following yesterday’s advance from 0.8015 to 0.8072. NZD/JPY retreated from 61.39 to 61.28 after yesterday it rose from 61.04 to 61.30.

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