Dollar little changed as investors await decisions from Fed, RBNZ
The New Zealand dollar was little changed as investors await tomorrow's outcome of central bank meetings in the US and New Zealand.
The kiwi slipped to 82.59 US cents at 8am in Wellington, from 82.75 cents at 5pm yesterday. The trade-weighted index was little changed at 78.18 from 78.20 yesterday.
Investors are reluctant to take major bets on currencies as they await the results of central bank meetings in the US and New Zealand tomorrow morning. Analysts expect the Federal Reserve Open Market Committee will continue to pare back its US$75 billion a month asset purchase programme, while in New Zealand some are betting the Reserve Bank could raise interest rates although the majority expect a rise in March.
"We didn't see much in the crosses overnight," said Tim Kelleher, ASB Bank head of institutional FX sales in New Zealand. "There's some pretty big events come Thursday with the FOMC and the Reserve Bank so I think we will be pretty quiet on the day."
The New Zealand dollar is likely to find support at 82.25 US cents and sellers towards 83 cents, Kelleher said.
Investors are stepping back into equities and emerging markets whose recent sell-off drove money into safe-haven currencies. Traders will be eyeing the outcome of Turkey's central bank meeting today after Governor Erdem Basci implied he would hike interest rates to rein in inflation, following an increase by the Indian central bank.
"It's been extremely volatile the last two to three days so the market is probably going to take the opportunity to sit on its hands until they get some more clarification later in the week," said ASB's Kelleher.
In New Zealand today, Finance Minister Bill English will appear before a select committee about the country's half-year fiscal results and the Reserve Bank publishes data on low-equity home lending for December.
In the US, President Obama delivers his State of the Union address.
The New Zealand dollar was little changed at 94.16 Australian cents from 94.06 yesterday following an upbeat Australian business confidence report yesterday.
The local currency was little changed at 49.84 British pence from 49.79 pence yesterday after a report showed the UK economy expanded 0.7 percent in the fourth quarter, as expected.
The kiwi was little changed at 60.48 euro cents and 84.99 yen.