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NZD/USD 0.7933 -0.0012
NZD/AUD 0.7510 -0.0036
NZD/JPY 65.74 -0.53
April 2013 Bond 3.505% -6.5 bps
May 2021 Bond 5.725% -4.0 bps
10-Year U.S. Spread +230 bps +2.0 bps
90-Day Bank Bill 2.66% unchanged


WELLINGTON (Dow Jones)--The New Zealand dollar was trading slightly weaker late Monday from late Friday in New Zealand but was off its early morning highs after inflation data printed below market expectations.

Earlier Monday, the statistics office said the country's consumer price index rose 0.8% on the quarter in the three months ended March 31. The CPI rose 4.5% compared with the year-earlier quarter. The market had been expecting a rise of 1.0% on the quarter and 4.7% on the year, according to the median forecast in a Dow Jones Newswires poll of 14 economists.

"Inflation came in well below the market forecast and our own pick. Consequently, the New Zealand dollar fell by half a cent, and the two-year swap rate fell five basis points. Markets had been toying with the idea that the RBNZ would begin hiking the OCR earlier than previously signalled. Market pricing backed off a little following the weak inflation print, but still suggests a 60% chance of an OCR hike by December this year," said Westpac Bank Chief Economist Dominick Stephens.

"There was a little bit of disappointment at the time because it does reaffirm all the expectations we have around the RBNZ keeping rates on hold," said Western Union Business Solutions corporate dealing manager Chris Hunter. He added, however, the initial steep drop was an overreaction.

The Kiwi tumbled to US$0.7920 on the news. Prior to the CPI data, the Kiwi had tested 0.8003 early in New Zealand. "We will probably just rebuild from there (the current level) and retest 0.8000 once the major markets open again," said Hunter.

He said there is little to hold the Kiwi back at the current time as it is largely gaining on global sentiment. A local bond trader said swap rates pushed lower at the short end while bonds ended higher. "It was all about the CPI today," he said.

-By Rebecca Howard, Dow Jones Newswires; 64-4-471-5990; [email protected]

[southernman]

While it's good that the NZ dollar is doing good. I just want the Korean Won to get stronger so I can send some money back home.

Damn, my money may be here for years waiting on a decent exchange rate

[Ramen]

[southernman]

[OneWayTraffic]

[southernman]

[OneWayTraffic]

Well we had the money tied up in Chonsei, so little choice really.

[southernman]