NZ Dollar Backs Off After Rally on Positive CPI

The New Zealand dollar advanced after today’s report showed that inflation was above analysts’ expectations. The currency shed its gains later and is trading near the opening level right now.
The Consumer Price Index rose 0.1 percent in the fourth quarter of 2013. It was smaller growth than in the third quarter (0.9 percent), but better than expectations of no growth. Annual inflation accelerated from 1.4 percent to 1.6 percent, exceeding the consensus forecast of 1.5 percent. The data led to speculations that the Reserve Bank of New Zealand will raise interest rates sooner, perhaps even this quarter.
NZD/USD was up from 0.8321 to 0.8340 intraday, but traded at 0.8317 as of 16:28 GMT today. NZD/JPY traded at about 86.61 after rallying from 86.68 to 87.19.

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