By Candice Zachariahs March 11 (Bloomberg) -- The New Zealand dollar fell against all of its 16 most-traded counterparts as the central bank signaled a slower exit from economic stimulus measures. The kiwi dropped for a second day versus the U.S. currency as Reserve Bank Governor Alan Bollard kept the target lending rate at a record low 2.5 percent and said weak business spending and higher bank-funding costs may slow the pace of future interest-rate increases. “Market expectations prior to the decision had been for a 25 basis point hike in June and every meeting thereafter until the end of the year,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “One of those tightenings may now be priced out of the curve, weighing on the New Zealand dollar.” New Zealand’s dollar slid 0.6 percent to 69.81 U.S. cents at 9:33 a.m. in New York, from 70.21 cents yesterday. The kiwi lost 0.5 percent to 63.19 yen, from 63.53. Australia’s currency decreased 0.2 percent to 91.35 U.S. cents, from 91.55 cents yesterday, when it reached 91.93, the highest level since Jan. 20. The currency declined 0.2 percent to 82.68 yen. New Zealand’s economy is in a “relatively sluggish” recovery with demand constrained by higher home-loan and business interest rates, Bollard said. Australia’s employers added the fewest jobs in six months in February, indicating the nation’s central bank has room to slow the pace of future interest-rate increases. The number of people employed rose 400 from January after jumping a revised 56,500 in the previous month. That was less than the median estimate of a 15,000 gain in a Bloomberg News survey of 25 economists. The jobless rate increased to 5.3 percent from a revised 5.2 percent. Australian government bonds fell. The yield on 10-year notes added 12 basis points, or 0.12 percentage point, to 5.67 percent, according to data compiled by Bloomberg. The price of the 4.5 percent security due in April 2020 slipped 0.88, or A$8.80 per A$1,000 face amount, to 91.14. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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