The Kiwi lost its ground against the US Dollar, following disappointing inflation report for New Zealand. The NZD/USD exchange rate dropped 83 base points or 1.12% to be seen trading below the 0.7350 level.
Statistics New Zealand stated that the country’s Consumer Price Index increased just 0.1% in the December quarter, missing expectations dramatically and causing a sell-off in the domestic currency. The result pressed yearly inflation growth pace to 1.6%, compared with expectations for 1.9%. The weak CPI figure would exacerbate the determination of the Reserve Bank of New Zealand to keep rates unchanged for years, ahead of the next monetary policy decision announcement on February 8.
