The New Zealand fell before the Reserve Bank's monetary policy review this morning, likely to keep interest rates on hold at a record low, and on speculation Greece will water down its austerity measures after this weekend's elections.

The New Zealand dollar fell to 77.37 US cents just before 8am from 77.64 cents from 5pm yesterday. The trade weighted index decreased to 70.37 from 70.71.

Governor Alan Bollard will keep the official cash rate on hold at a record-low 2.5 per cent, according to a Reuters survey of economists. Markets are pricing in 13 basis points of cuts over the coming year, according to the Overnight Index Swap curve, down from 44 basis points earlier this month.

"It will probably be as it has been in the last two meetings, the rates will remain unchanged," said Stuart Ive, currency strategist at HiFX. "There may be some talk of the high kiwi even though we have come down considerably - or a note about the commodity prices."


New Zealand's monetary policy statement comes as Greece prepares to go to the polls for the second time in six weeks on June 17. Greek politician Alexis Tsipras said he expects the European Union will do all it can to keep Greece in the euro even if his left-wing Syriza party wins the election and seeks to repeal austerity measures that are a condition of bailout funds.

The New Zealand dollar fell to 61.44 yen from 61.79 yen before a meeting of the Bank of Japan today. The BOJ is not expected to announce any new initiatives after its left asset-purchases unchanged at its May meeting. The central bank now regards asset purchases as its key monetary easing tool.

In the world's largest economy, the US, retail sales fell by 0.2 per cent last month, in line with expectations, according to the Commerce Department. Separate data showed producer prices sank 1 per cent, the largest fall in three years, exceeding expectations of a 0.6 per cent drop.

The US consumer price index and initial weekly jobless claims are also set for release on Thursday.

New Zealand's food price index is scheduled for release by Statistics New Zealand this morning.

The New Zealand dollar fell to 77.85 Australian cents from 78.05 cents and decreased to 61.57 euro cents from 62.15 cents. The kiwi was little changed on 49.92 British pence from 49.89 pence.