Investing.com - The New Zealand dollar dropped to one-week lows against its U.S. counterpart on Tuesday, after data showed that inflation expectations for New Zealand declined in the last quarter.
NZD/USD hit 0.7462 during late Asian trade, the pair's lowest since February 16; the pair subsequently consolidated at 0.7461, declining 0.85%.
The pair was likely to find support at 0.7429, the low of February 16 and resistance at 0.7548, Monday's high.
In a report, the Reserve Bank of New Zealand said its inflation expectations for the next two years fell to 1.8% in the fourth quarter of 2014 from 2.1% in the three months to September.
Meanwhile, investors remained cautious as Federal Reserve Chair Janet Yellen was to testify before the Senate Banking Committee in Washington later Tuesday, with market participants watching for any indication on when U.S. interest rates may start to rise.
Last week’s minutes of the Fed’s January meeting were more dovish than expected, showing that some officials thought that raising rates too soon could weigh on the U.S. economic recovery, and that a deterioration in the global economic outlook could also pose a threat.
The kiwi was also lower against the euro, with EUR/NZD advancing 0.77% to 1.5177.