NZD/USD drops on N.Z. inflation data

The New Zealand dollar dropped against its U.S. counterpart on Wednesday, weighed by the release of lower-than-expected inflation data from New Zealand, although upbeat Chinese economic growth data lent some support.

NZD/USD hit 0.8578 during late Asian trade, the pair's lowest since April 4; the pair subsequently consolidated at 0.8592, declining 0.60%.

The pair was likely to find support at 0.8531, the low of April 4 and resistance at 0.8682, the high of April 8.

Official data showed that New Zealand consumer price inflation rose 0.3% in the first quarter, less than the expected 0.5% increase, after a 0.1% gain in the three months to December.

Elsewhere, data showed that China’s gross domestic product expanded at an annual rate of 7.4% in the first three months of 2014, slowing from 7.7% in the fourth quarter, but slightly ahead of expectations for growth of 7.3%.

China is New Zealand's second biggest export partner.

The kiwi was lower against the euro, with EUR/NZD gaining 0.68% to 1.6092.

Later in the day, the U.S. was to produce reports on housing starts, building permits and industrial production.