2014.10.2400:20:00UTC+00NZ Dollar Extends Losses As Trade Data Accentuates Inflation-Induced Weakness

The NZ dollar continued to be Weak against the other major currencies in the Asian session on Friday, with the weakening impact of the tame inflation data released on Thursday continuing to impact the currency. Added to that the trade data released earlier in the day showed a wider than expected deficit for September.

Data from Statistics New Zealand showed that New Zealand had a merchandise trade deficit of NZ$1,350 million in September.That was well shy of forecasts for a shortfall of NZ$625 million following the NZ$472 million deficit in August.

Exports were down 5.3 percent on year to NZ$3.61 billion - topping forecasts for NZ$3.50 billion and up from NZ$3.52 billion in the previous month.

The NZ dollar fell against the other major currencies on Thursday, although it was slightly higher against the other major currencies in the New York session overnight.

On Thursday, the NZ dollar fell 1.35 percent against the U.S. dollar, 0.30 percent against the yen, 1.36 percent against the euro and 1.18 percent against the Australian dollar. The currency was reacting to the inflation data for the third quarter, which came in at 0.3 percent on quarter in the third quarter of 2014. This was below expectations for an increase of 0.5 percent

In the Asian trading, the NZ dollar fell to more than a 2-week lows of 0.7792 against the U.S. dollar and 1.1226 against the Australian dollar from yesterday's closing quotes of 0.7821 and 1.1191, respectively. If the kiwi extends its dowtrend, it is likely to find support around 0.76 against the greenback and 1.13 against the aussie.

Against the euro, the kiwi slipped to a 1-week low of 1.6219 from yesterday's closing quote of 1.6151. The kiwi may test support near the 1.63 region.

The kiwi edged low to 84.26 against the yen, from yesterday's closing quote of 84.68. On the downside, 83.30 is seen as the next support level for the kiwi.

Looking ahead, German GfK consumer sentiment index for November is due at 2:00 am ET.

In the New York session, U.S. new home sales for September is due to be released.