Dollar fails to budge from key 84.60 USc level in directionless market
The New Zealand dollar continues to hover around its key 200-day moving average of about 84.60 US cents with no significant economic data or central bank action to provide direction and as many traders in the northern hemisphere take summer holidays.
The kiwi was little changed at 84.61 US cents at 8am in Wellington from 84.67 cents at 5pm yesterday. The trade-weighted index was at 79.38 from 79.39 yesterday.
New Zealand's currency has been a favourite among investors this year after a series of interest rate increases boosted its yield advantage over its peers. That advantage has limited the kiwi's 3.9 percent decline over the past month amid falling commodity prices, a pause in interest rate hikes, Reserve Bank intervention threats and increased demand for the greenback. In a data light week, traders will be weighing sentiment on tensions in Ukraine and Iraq for currency market direction.
"After a tumultuous week marked by geopolitical swings and surprising economic data, foreign exchange markets opened for trade in a much calmer mood as tensions between Russia and Ukraine as well as conflicts in the Middle East appear to have eased somewhat over the weekend," Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management in New York, said in a note. "Dealing has been exceedingly quiet on the first trading day of the week with no fresh economic data or political news to move the markets.
"This week in general could prove to be a snoozer in the currency market as we find ourselves at the peak of summer doldrums with most of the key players enjoying the beaches of Costa del Sol or Hamptons rather than staring at their monitors."
The kiwi will probably trade between 82.30 US cents and 86 cents this week, according to a BusinessDesk survey of 10 traders and strategists. Five predict the kiwi will remain largely unchanged this week, while three expect it may gain and two predict a drop.
There is little scheduled for the local calendar today. The Real Estate Institute expects to publish its latest monthly house price data in the coming days.
The New Zealand dollar edged up to 91.31 Australian cents from 91.21 cents yesterday ahead of a report on Australian business confidence today.
The local currency was little changed at 63.21 euro cents from 63.17 cents yesterday ahead of a ZEW reports on German and European economic sentiment tonight.
The kiwi slipped to 50.39 British pence from 50.44 pence ahead of tomorrow's releases of July employment data and the Bank of England's quarterly inflation report.
The New Zealand dollar was little changed at 86.45 yen from 86.46 yen yesterday