Investing.com - The New Zealand dollar dropped to a more than one-month low against its U.S. counterpart on Thursday, after the Reserve Bank of New Zealand raised interest rates by a quarter percentage point but signaled that rates will not go any higher this year.
NZD/USD hit 0.8572 during late Asian trade, the pair's lowest since June 11; the pair subsequently consolidated at 0.8579, tumbling 1.08%.
The pair was likely to find support at 0.8524, the low of June 11 and resistance at 0.8628, the high of June 11.
In a widely expected move, the RBNZ raised its benchmark interest rate to 3.50% from 3.25%.
Commenting on the decision, RBNZ Governor Graeme Wheeler announced a pause in the country's first round of interest-rate increases this year as the rising New Zealand dollar continues to curb inflation.
"It is prudent that there now be a period of assessment before interest ratesadjust further toward a more-neutral level," Mr. Wheeler said
"The level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall," he added.
Separately, official data showed that New Zealand's trade surplus narrowed to NZ$247 million last month, from NZ$285 million in May. Analysts had expected the trade surplus to narrow to NZ$150 million in June.
Elsewhere, data showed that China's HSBC Flash Manufacturing Purchasing Managers' Index rose to an 18-month high of 52.0 in June, from a reading of 50.7 the previous month, exceeding expectations for an increase to 51.0.
The upbeat data eased concerns over a slowdown in the world's second biggest economy. China is New Zealand's second biggest export partner.
The kiwi was also sharply lower against the euro, with EUR/NZD jumping 1.04% to 1.5671.
Later in the day, the U.S. was to produce data on unemployment claims, manufacturing activity and new home sales.