The Australian dollar slid about half a US cent on Tuesday in the face of lower-than-expected consumer inflation data, which reinforced market expectations the central bank will likely not hike interest rates until well into the year. Australia's trimmed mean measure of core inflation was just 2.2 percent in the fourth quarter, well below an expected reading of 2.6 percent and near the bottom of the Reserve Bank of Australia's 2-3 percent target band. See for full story.
Still, the Aussie dollar fell to a low of $0.9927, having risen above parity overnight. It last stood at $0.9950, with initial support seen at around $0.9906, the 61.8 pct retracement of the January 12-19 rise. The Aussie was also pressured on the crosses, hitting one-week lows versus the New Zealand dollar. It plumbed NZ$1.2971, from a session high of NZ$1.3071, before recovering slightly to NZ$1.2995.
The New Zealand dollar escaped most of the drama faced by the Aussie, to last trade at $0.7653, a shade above $0.7638 late in New York on Monday. Support for the kiwi is seen starting from $0.7594 and resistance at $0.7687. Trade in the kiwi will likely be lighter on Wednesday with Australia on holiday.