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The NZD/USD pair declined with the star of the week as the New Zealand dollar weakened against its U.S. counterpart after the New Zealand consumer price index retreated to 0.8% during the first three months of 2011, slower than estimates for a 1.0 percent advance.
Investors cut their bets that the Reserve Bank of New Zealand will increase interest rates during the coming months, amid other signs reflecting the struggling recovery in New Zealand which weighed negatively on kiwi amid a fragile negative sentiment in the market. Â
The Reserve Bank of New Zealand is projected to raise its benchmark rate of 2.5 percent by 54 basis points over the next 12 months. The New Zealand dollar dropped against all major currencies on the trimmed bets for tightening.
On Tuesday, at 12:30 GMT, U.S. economy will release building permits March, and expected to come at 540 thousand rising from the previous 517 thousand. The housing starts for March is expected to have increase to 520 thousand following 479 thousand which will support ease risk aversion on the data and likely support kiwi slightly against the dollar.Â
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