Investing.com - The New Zealand dollar dropped to fresh seven-month lows against its U.S. counterpart on Thursday after the Reserve Bank of New Zealand left interest rates unchanged and signaled that borrowing costs will remain on hold for some time.
NZD/USD hit 0.8179 during late Asian trade, the pair's lowest since February; the pair subsequently consolidated at 0.8181, slipping 0.17%.
The pair was likely to find support at 0.8048 and resistance at 0.8266, Wednesday's high.
In a widely expected move, the RBNZ held its benchmark interest rate at 3.50%.
The central bank also signaled that it will keep interest rates on hold for a longer period of time after lowering inflation forecasts to 1.4% in the 12 months ending March 31, down from the 1.8% forecast in June.
Commenting on the decision, RBNZ Governor Graeme Wheeler said "it is prudent to undertake a period of monitoring and assessment before considering further policy adjustment."
Wheeler also said he expects "a further significant depreciation" in the New Zealand dollar.
Meanwhile, the greenback remained supported by expectations for an early hike in U.S. interest rates. A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.
The kiwi was steady against the euro, with EUR/NZD edging up 0.16% to 1.5782.
Later in the day, the U.S. was to produce the weekly report on initial jobless claims.