* Dollar rise stalls again after bullish housing data
* Eyes on UK and U.S. inflation, Jackson Hole
* Kiwi slides as soft data points to pause in tightening
By Patrick Graham
WARSAW, Aug 19 The New Zealand dollar slid
almost half a percent on Tuesday after the government trimmed
its forecast for growth and future budget surpluses, while
progress for its U.S. counterpart halted near the top of a
European trade in the major currencies looked set to be
dominated by British inflation numbers due early in the session
as well as the debate over whether the dollar can move higher
after the stalling of a month-long rally so far in August.
The kiwi, down more than 4 percent from record highs hit in
July, was the only major mover in Asian time, also suffering
from a dip in producer prices which reflected broader concerns
over growth and demand for New Zealand's dairy exports.
"NZD was sold off hard after the PREFU (fiscal update),"
said Sue Trinh, a strategist with RBC Capital Markets in Hong
Kong. "Specifically, the market was upset by downgrades to GDP
The growth forecasts, however, still showed New Zealand
outstripping most of its developed world peers, trimming
government forecasts for growth in the year to next March to 3.8
percent from 4 percent earlier.
That underlines a relatively robust picture that has driven
a steady rise in interest rates at a time when those in Europe
and the United States are nailed to all-time lows. The kiwi's
problem is that many in markets are convinced the best news on
the economy is all priced in. It was 0.44 percent lower at
$0.8440 in early London deals.
The U.S. dollar jumped higher on Monday after a handful of
more positive signs on the housing market there that ran counter
to the relaxed stance on monetary policy laid out by Federal
Reserve speakers so far in August.
Market attention this week is focussed on the annual Jackson
Hole meeting of bankers starting on Thursday, but a range of
data before then could reinforce the growing optimism about the
economy which gripped markets in July.
Hans Redeker, head of global currency strategy at Morgan
Stanley in London, said he saw Fed chief Janet Yellen's recent
leaning towards keeping policy loose for longer as leaving the
market exposed to any indications in the opposite direction.
He said he expected both Yellen and this week's numbers data
could pull expectations for how fast U.S. interest rates will
rise back the other way, opening the door to more gains for the
greenback - up 2.5 percent against the euro since early July.
"All in all, we should see this week that the short-term
dollar correction has run its course," he said. "I would
position myself in a pro-dollar way."
U.S. inflation numbers are due later on Tuesday.
Sterling, another of the past year's winners among the major
currency pairs, was a touch lower ahead of the UK price data.
It has been pushed around by conflicting signals on the
chances of official interest rates rising this year. Inflation
is expected to dip further below the central bank's 2 percent
target, but is far higher than that in mainland Europe.
Markets are also awaiting details on Wednesday of the Bank
of England's most recent discussion on interest rates, which
some expect may show the first dissenting vote on its policy
committee for an immediate rise.
"Softer than expected CPI could see the pound re-test the
$1.6660 low of the current move, though follow-through will be
limited ahead of the minutes," said Kit Juckes, a strategist
with French bank Societe Generale in London.
"The pound is likely to fall from here against the dollar
over time, but only when US rates policy shifts."
(Editing by Andrew Heavens)