In the Asian session on Monday, the New Zealand dollar eased from last Friday's 3-year high against the U.S. dollar after a government report showed that the New Zealand's consumer price inflation rose less than expected in the first quarter of 2011.
Consumer prices in New Zealand rose 4.5 percent on year in the first quarter of 2011, Statistics New Zealand said. That was slightly better than forecasts for an increase of 4.6 percent after the inflation rate had come in at 4.0 percent in the previous three months.
On a seasonally adjusted quarterly basis, consumer prices rose 0.8 percent - again exceeding expectations for a 1.0 percent increase following the 2.3 percent jump in the fourth quarter of 2010.
Meanwhile, a monthly survey report by Business New Zealand showed that an indicator of service sector performance in New Zealand declined in March, due mainly to a slowdown in activity after the February earthquake. The seasonally adjusted Performance of Service Index (PSI) was at 50.8 in March, down from 51 in the previous month.
The New Zealand dollar declined to a 4-day low of 0.7921 against the US dollar in Asian deals on Monday. This was down 1 percent from a 3-year high of 0.8002 hit on Friday. If the kiwi weakens further, it may likely target the 0.788 level.
The New Zealand dollar that climbed to an 8-week high of 1.3202 against the Australian dollar in early Monday Asian deals at 5:35 pm ET lost 0.8 percent thereafter. The kiwi is now trading at a 4-day low of 1.331 against the aussie with 1.334 seen as the next downside target level. At Friday's close, the aussie-kiwi pair was quoted at 1.3220.
During Asian deals on Monday, the New Zealand dollar declined to a 4-day low of 65.70 against the Japanese yen. The near term support for the kiwi is seen around the 65.5 level. The kiwi-yen pair was worth 66.45 at last week's close.
There are no major economic reports due in the European session.
At 10:00 am ET, the Eurozone consumer confidence data and the U.S. NAHB housing market index - both for April are scheduled for release.
by RTT Staff Writer
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