Investing.com - The New Zealand dollar was higher against its U.S. counterpart on Tuesday, but gains were expected to remain limited by data showing that Japan's economy fell back into recession and ahead of comments by the country's prime minister.
NZD/USD hit 0.7950 during late Asian trade, the session high; the pair subsequently consolidated at 0.7944, gaining 0.44%.
The pair was likely to find support at 0.7822, the low of November 14 and resistance at 0.8037, the high of October 21.
Demand for the safe-haven greenback remained supported after data on Monday data showed that Japan’s economy contracted by an annualized 1.6% in the third quarter, compared to forecasts for growth of 2.5%.
Investors were also cautious as Japan Prime Minister Shinzo Abe was expected to announce later Tuesday that a sales-tax increase due to come into effect next year would be delayed and to call for elections to be held next month.
The kiwi was higher against the Australian dollar, with AUD/NZD shedding 0.21% to 1.0984.
Also Tuesday, the minutes of the Reserve Bank of Australia's November policy meeting showed that the bank intends to keep interest rates a record lows, in order to support growth.
The Australian dollar's gains were limited however, as the central bank also said that the nation's currency remains overvalued.
"Growth is still expected to be below trend over 2014-15, before gradually picking up," the RBA added.
Later in the day, the U.S. was to release data on producer price inflation.