The New Zealand dollar was little changed in local trading as investors spooked by problems in some emerging economies last week were reluctant to seek riskier assets, and as trading desks in Auckland and Australia were closed for public holidays.
The kiwi traded at 82.22 US cents at 5pm in Wellington from 82.32 cents at 8am and 82.11 cents at the close of trading in New York on Friday. The trade-weighted index was almost unchanged at 77.88 from 77.86 last week.
The volume of trading was light with Auckland, New Zealand's main financial hub, closed for the city's anniversary day and Australia Day closing desks across the Tasman. Stocks across Asia fell as investors continued to spurn risk-sensitive assets after weak Chinese manufacturing figures last week sparked fears over emerging markets, and were further fanned by Argentina devaluing its peso and Turkey's central bank intervening in foreign exchange markets.
That comes ahead of policy reviews by the US Federal Reserve and New Zealand's Reserve Bank this week, which will set the direction for currency markets. The Fed may trim another US$10 billion from its US$75 billion monthly asset purchase programme, while traders are split on whether the RBNZ will start hiking interest rates at this meeting or the next.
"Markets aren't really sure what to do today as they catch up with moves in Europe and the US," said Stuart Ive, senior client adviser at OMF. "Barring any contagion from fears financial markets are breaking down, the kiwi will probably track largely sideways while we wait for the official lines from the RBNZ and FOMC (Federal Open Market Committee)."
A BusinessDesk survey of six traders and strategists predicts the local currency may trade between 80.80 US cents and 84.20 cents this week. Four predict the kiwi will fall this week, while two expect it to remain largely unchanged.
Today's BNZ-BusinessNZ performance of services index gave another indication of New Zealand's growing economic momentum, showing expansion for an eighth month, with strong reading among retailers.
The kiwi fell to 94.28 Australian cents at 5pm in Wellington from 94.76 cents on Friday in New York, and gained to 84.24 yen from 83.95 yen. It traded at 60.11 euro cents from 60.05 cents, and was little changed at 79.85 British pence from 49.83 pence last week.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Editor's Insight: Sceptics’ Guide to the Paris climate summit
- MARKET CLOSE: NZ shares fall with profit taking on Spark, Freightways, SkyCity
- IRD eyes hybrid instruments, related party debt in global tax avoidance clamp-down
- Three companies meet crowdfunding targets
- Scentre Group's shopping mall sell-off
Most listened to
- How might the government best encourage NZ space industry? Helmore Ayers Lawyers consultant lawyer Dr Maria Pozza explains
- Forsyth Barr's Matthew Leach on why he expects Xero to drop from the NZX 10 index
- Education consultant Sharndre Kushor says Crimson Consulting’s new website is the “Netflix for educational achievement”
- Nathan Smith breaks down the latest foreign affairs news
- NZIER's Kirden Lees and Rob Hosking discuss changing how the Reserve Bank targets interest rates