New Zealand Dollar Lower on Broad U.S. Dollar Strength

 
   By Lucy Craymer 
 

        WELLINGTON, New Zealand--The New Zealand dollar was trading lower late Tuesday due to broad strength in the U.S. dollar as the market returned its focus to the U.S. and the likelihood the Federal Reserve will start to increase rates in 2015.
        "With European Union leaders hailing a Greek deal and Chinese equities continuing to stabilize, market attention has returned to the U.S. dollar and plans for normalization," said ANZ Bank in a note. Focus is on Federal Reserve Chairwoman Janet Yellen's bi-annual testimony to U.S. Congress late in the global day Wednesday.
        Furthermore, the New Zealand dollar is under pressure as markets expect further weakness in dairy prices in the GlobalDairyTrade auction also late Wednesday. Investors also expect second-quarter inflation data, due to be released on Thursday, to confirm that inflation has ticked up slightly but remains under pressure.
        The median from The Wall Street Journal's poll of 14 economists sees annual inflation at 0.4% compared with 0.1% in the first quarter but significantly below the New Zealand central bank's target range of 1% to 3%. A particularly soft number could see markets increasing the number of rate cuts it expects the Reserve Bank of New Zealand to make.
        "I'm not expecting great things for the Kiwi this week," said Western Union Business Solutions Corporate Dealing Manger Chris Hunter.
        The Kiwi was at US$0.6680 in late Wellington trading, compared with US$0.6733 late Monday. The New Zealand dollar was at 0.8992 Australian dollars versus A$0.9056 previously.
        Write to Lucy Craymer at lucy.craymer@wsj.com, @lucy_craymer
        (END) Dow Jones Newswires

        July 14, 2015 02:16 ET (06:16 GMT)

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