Forex - NZD/USD off record high amid profit taking

Forexpros – The New Zealand dollar pulled back from an all-time high against its U.S. counterpart on Wednesday, after its record rally on the back of rate hike expectations prompted some investors to sell the currency to lock in profits.

NZD/USD pulled back from 0.8571, the pair’s highest since exchange rate controls ended in March 1985, to hit 0.8547 during late Asian trade, slipping 0.09%.

The pair was likely to find support at 0.8429, Tuesday’s low and short-term resistance at 0.8600.

Official data earlier in the week, showing that consumer price inflation rose by 1% in the second quarter, pushing the annual rate to a 21-year high of 5.3%, added to expectations that the Reserve Bank of New Zealand will hike its benchmark interest rate at its policy setting meeting next week.

New Zealand’s central bank lowered the official cash rate to 2.5% in March to revive confidence after an earthquake devastated the southern city of Christchurch.

The kiwi was also fractionally lower against its Australian cousin, with AUD/NZD easing up 0.06% to hit 1.2549.

A report earlier showed that an index of leading Australian economic indicators fell in May, as consumers cut back spending.

The Westpac-Melbourne Institute Leading Index dipped 0.1% in May, recording growth of just 1.6%.

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