WELLINGTON (Dow Jones)--The New Zealand dollar continued to slip against the U.S. dollar Wednesday, as the greenback remained strong and investors sold long positions ahead of the Reserve Bank of New Zealand's monetary policy meeting tomorrow. RBS Currency Strategist Greg Gibbs said investors were positioning themselves ahead of the decision, which is expected to be accompanied by a dovish statement on the outlook for the economy. "The U.S dollar has risen broadly--which is a curious thing--as U.S yields jumped sharply today and have been rising recently so that may be a factor," he added, saying the local unit's move lower was probably partly related to stronger yields in the U.S. and partly to do with positioning in the kiwi. Twelve economists polled by Dow Jones Newswires all predicted the Reserve Bank would hold the official cash rate at 3.0%. Gibbs said the New Zealand dollar also underperformed the Australian dollar, probably due to weak domestic construction and manufacturing data for the third quarter, which points to downside risks for gross domestic product. "While construction activity was close to expectations, manufacturing production was much weaker. As a result we have revised down our forecast for GDP growth to just 0.2% over Q3, from 0.5%," ASB economist Jane Turner said. New Zealand government bonds fell tracking overnight moves in U.S. Treasurys, which saw yields rise up to 20 basis points, said a local bond trader, adding that the focus now is on the RBNZ's monetary policy statement. The rise in U.S. Treasury yields also helped interest rate swaps rise across the curve.

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