The New Zealand dollar slipped 0.25% to 0.6114 against the USD in the European session after Q4 inflation expectations eased to 2.5%, the lowest in over two years.

The decline is a positive development for the Reserve Bank of New Zealand, prioritising the battle against inflation.

The RBNZ is currently dealing with an inflation rate of 4.7%, above the target range.

The probability of a rate hike at the Feb. 28 meeting stands at 45%, rising to 80% for the May meeting.