The New Zealand dollar fell one US cent on Thursday after a surprisingly weak inflation reading raised expectations that interest rates may remain on hold well into 2015. The sell-off pinned down the Australian dollar. The fall of more than 1 percent took the New Zealand dollar to $0.7837, pulling closer to a 17-month trough of $0.7708 touched late September.
The kiwi sold off broadly, pushing the Aussie up to around NZ$1.1163, its strongest in two weeks. This sent the kiwi 1.4 percent lower at 76.36 versus a currency basket. Strong support was found around $0.7800. New Zealand's annualised domestic consumer price index came in at 1.0 percent in July-September, from 1.6 percent in the previous quarter and undershooting the Reserve Bank of New Zealand's 1.3 percent forecast. New Zealand government bonds rallied, pushing most yields 4 basis points lower.