Investing.com - The New Zealand dollar dropped to three-week lows against its U.S. counterpart on Wednesday, after the release of lower than expected inflation data from New Zealand and as markets eyed fresh remarks by Federal Reserve Chairwoman Janet Yellen later in the day.
NZD/USD hit 0.8691 during late Asian trade, the pair's lowest since June 25; the pair subsequently consolidated at 0.8698, retreating 0.79%.
The pair was likely to find support at 0.8662, the low of June 25 and resistance at 0.8768, the high of July 7.
Official data showed that consumer price inflation in New Zealand remained unchanged at 0.3% in the second quarter, compared to expectations for an uptick to 0.4%.
On a yearly basis, New Zealand CPI rose to 1.6% from 1.5% a year earlier, compared to expectations for an increase to 1.8%.
Meanwhile, the greenback remained supported after Ms. Yellen on Tuesday said interest rates could rise sooner if the labor market was to improve more quickly than expected. However, the Fed chair also said that if the economic recovery disappoints monetary policy would remain accommodative.
The remarks came during testimony to the Senate Banking Committee in Washington.
Ms. Yellen said the economy is continuing to improve but added that the recovery is not yet complete and reiterated that rates are likely to remain on hold for a considerable period after the bank’s quantitative easing program ends.
The kiwi was also lower against the euro, with EUR/NZD advancing 0.72% to 1.5589.
Later in the day, the U.S. was to release reports on producer price inflation and industrial production.