Kiwi Dollar Slips on Easing Inflation Expectations

New Zealand's dollar slipped after the Reserve Bank of New Zealand (RBNZ) survey showed people expect much slower inflation over the next year.

The RBNZ's latest survey revealed a significant drop in one-year inflation expectations, falling to 2.6% from 3.4%, indicating that the recent inflation burst is easing in people's minds.

This development sent markets signaling that the RBNZ may not need to push interest rates as high as feared, even if traders still see another hike as likely soon.

The two-year swap rate, a closely watched indicator of market expectations for policy, fell to about 3.59%.