NZD/USD lower on drought concerns

The New Zealand dollar is trading lower against its U.S. counterpart and other major currencies today on speculation a worsening drought in that country could hamper the economy there.

In Asian trading Wednesday, NZD/USD fell 0.28% to 0.8246. The pair was likely to find support at 0.8216, the low of March 1 and resistance at 0.8294, the high of March 8.

On Tuesday, New Zealand Finance Minister Bill English said the elevated temperatures could hinder e economic growth. Official data released on Tuesday showed food prices in New Zealand declined 0.3% in February after rising 1.9% in January, but the drought could cause food prices to rise.

News of the drought, which some market participants say is worsening by the day, coincides with a Reserve Bank of New Zealand meeting later today. Traders widely expect the central bank to keep interest rates unchanged at 2.5%. Continue Reading....