The New Zealand dollar extended declines against the other major currencies in the early Asian session on Wednesday after quarterly consumer price inflation data released earlier in the day showed that the nation slipped into deflation.

Data released by the Statistics New Zealand showed that consumer prices in New Zealand were down 0.2 percent on quarter in the fourth quarter of 2014. This missed expectations for a flat reading following three straight quarters of 0.3 percent gain.

On a yearly basis, consumer prices climbed 0.8 percent - also below forecasts for 0.9 percent and down from 1.0 percent in the previous three months.

Tuesday, the NZ dollar fell 1.73 percent against the U.S. dollar, 0.74 percent against the yen, 1.22 percent against the euro and 1.25 percent against the Australian dollar.

In the early Asian trading today, the NZ dollar fell to a 1-1/2-month low of 1.0710 against the Australian dollar and more than a 2-week low of 0.7622 against the U.S. dollar from yesterday's early highs of 1.0533 and 0.7781, respectively. The kiwi is likely to find support around 1.08 against the aussie and 0.75 against the greenback.

Against the euro, the kiwi slipped to a 5-day low of 1.5147 from yesterday's early highs of 1.4885 and held steady thereafter.

The kiwi dropped to a 1-week low of 90.38 against the yen, from yesterday's closing quote of 90.72. If the kiwi extends its downtrend, it is likely to find support around the 89.79 area.

Looking ahead, U.K. unemployment rate for November, claimant count rate for December and Bank of England's minutes from its January policy meeting and Switzerland ZEW survey economic expectation index for January are due to be released in the European session.

In the New York session, U.S. building permits and housing starts for December and Canada wholesale sales data for November are scheduled for release.

At 7:00 am ET, Bank of England Deputy Governor Minouche Shafik will deliver a speech on financial markets in Brussels.

At 10:00 am ET, the Bank of Canada will announce its decision on interest rates and release its quarterly monetary policy report. Economists expect the key rate to be kept unchanged at 1.00 percent. Subsequently, Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins are due top hold a news conference to explain the rate decision and the monetary policy report.

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