Westpac: The decline in the New Zealand dollar following the release of inflation data is likely to be temporary.

Westpac says the New Zealand dollar fell after inflation data came in below expectations, but the decline is unlikely to be sustained, with consumer prices likely to accelerate again by year-end. Imre Speizer, the bank's Auckland-based strategist, said that although headline inflation was slightly below expectations, "the data was not surprising enough to trigger a large NZD move, and will only have a mildly negative impact." The third-quarter slowdown in inflation is likely just a temporary dip, with inflation set to rise back above 4% by year-end and remain above the Reserve Bank of New Zealand's current forecasts for most of next year. NZD/USD "after an initial decline, may resume its rally toward the 0.57 to 0.575 range."