New Zealand’s consumer prices rose 1.6 percent in the second quarter from a year earlier, less than the 1.8 percent increase. The central bank has raised its benchmark rate by 75 basis points, or 0.75 percentage point, this year to 3.25 percent, the highest among major developed nations.
New Zealand’s dollar slides most in seven weeks on CPI increased less than economists forecast and a gauge of dairy prices dropped to the lowest level since 2012.
Swap traders predict policy makers will boost the cash rate by 69 basis points in the next 12 months, less than the 84 basis points indicated yesterday, according to a Credit Suisse Group AG index.
The kiwi weakened versus all of its 16 major peers amid speculation the Reserve Bank of New Zealand will delay raising interest rates. A gauge of the U.S. dollar climbed to a three-week high before Federal Reserve Chair Janet Yellen testifies to lawmakers in Washington for a second day. Australia’s currency fell after the nation’s two-year note yield declined to the lowest since September. South Korea’s won slid to the weakest since April amid bets the nation will cut borrowing costs.
New Zealand’s currency tumbled 0.8 percent to 87.01 U.S. cents at 7:18 a.m. in London, the biggest decline since May 28. The currency’s five-day losing streak is the longest since the period ended Dec. 27.