Investing.com - The Kiwi held weaker in Asia on Monday after a slower pace than expected consumer price data widened the scope for a lower official cash rate (OCR) in the near future.
NZD/USD traded at 0.7083, down 0.51% after the CPI data.
New Zealand said second quarter CPI came in at 0.4% for the quarter-on-quarter and year-on-year figures. below the 0.5% gain seen for both periods. The next rate review by the RBNZ is Aug. 11, though the central bank policymakers may be concerned by the continued rise in house-related inflation and hold steady at 2.25%.
The RBNZ will release an updated economic assessment on Thursday and the market is expected to raise bets for a 25 basis-point cut in August from an already elevated 70% chance priced in prior to the data.
Elsewhere, USD/JPY rose 0.83% to 105.75, while AUD/USD traded at 0.7586, up 0.08%. GBP/USD traded at 1.3256, up 0.57%.
In China house prices data for June showed a gain of 7.3% year-on-year with the previous month up 6.9%.
In Japan, markets are shut for a national holiday.
The aftermath of the coup attempt in Turkey heightens regional political risk with oil flows through the region increasingly in sharp focus as a result.
Also, investors await the outcome of Thursday’s European Central Bank meeting to see if policymakers will step up easing measures to offset the fallout from the Brexit vote. The U.K. is to release what will be closely watched reports on employment, inflation and manufacturing activity and the U.S. is to produce a pair of reports on the health of the housing sector.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.18% to 96.53.
Last week, the dollar rallied against the Turkish lira late Friday, while the safe haven yen turned higher, following an attempted coup by a faction inside the Turkish military.
Investors also sought refuge in the traditional safe haven yen, which is typically bought up by investors in times of market turmoil.
The dollar had gained ground against the Japanese currency earlier in the day as upbeat economic reports out of the U.S. and China bolstered risk appetite.
The Commerce Department reported that U.S. retail sales rose 0.6% in June, the third straight monthly increase and easily outstripping gains of 0.1% forecast by economists.
Chinese data on industrial production and retail sales also beat expectations, indicating that the world’s second largest economy still has momentum.
The dollar still ended the week with gains of 4.16% against the yen as mounting expectations for additional monetary easing by Tokyo continued to pressure the currency lower.
The pound fell sharply against the dollar, with GBP/USD down 1.2% at 1.3181 late Friday after Andy Haldane, the Bank of England’s chief economist, said the bank is poised to ease monetary policy in August to counteract the negative economic shock from the Brexit vote.
But sterling still ended the week with gains of 1.85% after the BoE kept interest rates on hold at the conclusion of its policy meeting on Thursday, dashing expectations for a rate cut.