Investing.com - The New Zealand dollar tumbled against its U.S. counterpart on Tuesday, following comments by the Reserve Bank of New Zealand, while investors remained cautious amid ongoing uncertainty over the future of the Federal Reserve's stimulus program.
NZD/USD hit 0.7973 during late Asian trade, the pair's lowest since August 14; the pair subsequently consolidated at 0.7969, plummeting 1.23%.
The pair was likely to find support at 0.7884, the low of August 7 and resistance at 0.8075, the session high.
The kiwi came under pressure after the RBNZ said the kiwi as overvalued, adding that while a rate rise might be needed next year, it wasn't needed now.
In addition, RBNZ Governor Graeme Wheeler announced home lending restrictions to help cool the market without having to raise interest rates.
Separately, a report showed that inflation expectations for New Zealand rose to 2.4% in the second quarter, from 2.1% in the three months to March.
Meanwhile, investors were looking ahead to the minutes of the Fed's July meeting, due out on Wednesday, for further indications as to when the central bank may start to unwind its USD85 billion-a-month asset purchase program.
Expectations that the Fed may begin tapering as soon as next month were boosted after data last week showed that U.S. weekly jobless claims fell to an almost six year low.
The kiwi was lower against the Australian dollar with AUD/NZD climbing 0.46%, to hit 1.1343.
Also Tuesday, in the minutes of its latest policy meeting, the Reserve Bank of Australia said the Aussie's direction will be important in setting policy and signaled further interest rate cuts remain a possibility.
On August 6, the RBA lowered its benchmark interest rate to a record low 2.5%.
NZD/USD hit 0.7973 during late Asian trade, the pair's lowest since August 14; the pair subsequently consolidated at 0.7969, plummeting 1.23%.
The pair was likely to find support at 0.7884, the low of August 7 and resistance at 0.8075, the session high.
The kiwi came under pressure after the RBNZ said the kiwi as overvalued, adding that while a rate rise might be needed next year, it wasn't needed now.
In addition, RBNZ Governor Graeme Wheeler announced home lending restrictions to help cool the market without having to raise interest rates.
Separately, a report showed that inflation expectations for New Zealand rose to 2.4% in the second quarter, from 2.1% in the three months to March.
Meanwhile, investors were looking ahead to the minutes of the Fed's July meeting, due out on Wednesday, for further indications as to when the central bank may start to unwind its USD85 billion-a-month asset purchase program.
Expectations that the Fed may begin tapering as soon as next month were boosted after data last week showed that U.S. weekly jobless claims fell to an almost six year low.
The kiwi was lower against the Australian dollar with AUD/NZD climbing 0.46%, to hit 1.1343.
Also Tuesday, in the minutes of its latest policy meeting, the Reserve Bank of Australia said the Aussie's direction will be important in setting policy and signaled further interest rate cuts remain a possibility.
On August 6, the RBA lowered its benchmark interest rate to a record low 2.5%.