Kiwi little changed as traders await Fed meeting, slew of US data

The New Zealand dollar was little changed in local trading as investors await a slew of US economic data and the Federal Reserve's latest update on monetary policy.

The kiwi traded at 80.78 US cents at 5pm in Wellington from 80.75 cents at 8am and 80.84 cents on Friday in New York. The trade-weighted index was 75.93 from 76.02 last week.

Federal Open Market Committee members will review US monetary policy in a two-day meeting on July 30 and 31, as they weigh up the recovery of the world's biggest economy and whether to start unwinding their stimulus.

Chairman Ben Bernanke has previously said the bank may start slowing its pace of monthly asset purchases if things continue to improve. That means US employment figures, second-quarter growth and a manufacturing survey this week will be keenly watched by the market this week.

"We expect the US data will be a bit stronger than what the market does, and overall that should support the US dollar," says Peter Dragicevich, currency strategist at Commonwealth Bank of Australia in Sydney. "The kiwi should drift a little lower this week."

A BusinessDesk survey of 10 traders and strategists predicts the local currency may trade between 78.60 US cents and 82.30 cents this week. Seven expect the New Zealand dollar to rise and three are picking a fall.

Mr Dragicevich said the kiwi may out-perform against the British pound and euro this week, with the European Central Bank and Bank of England also reviewing monetary policy, and likely to keep a dovish tone.

"The RBNZ will be one of the first, if not the first, major central banks to hike rates, albeit next year," which is feeding into support for the kiwi, he says.

Traders are pricing in 61 basis points of increases to New Zealand's 2.5 percent official cash rate over the coming 12 months, according to the Overnight Index Swap curve.

The local currency traded at 60.83 euro cents from 60.87 cents last week and 52.51 British pence from 52.55 pence. It fell to 79.02 yen from 79.45 yen last week and traded at 87.27 Australian cents from 87.22 cents.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6692 -0.0058 -0.86%
AUD 0.9312 -0.0031 -0.33%
EUR 0.6023 -0.0005 -0.08%
GBP 0.4576 -0.0027 -0.59%
HKD 5.1986 -0.0433 -0.83%
JPY 73.7220 -0.3600 -0.49%

Commods

Commodity Price Change Time
Gold Index 1212.7 -6.530 2016-05-27T00:
Oil Brent 50.0 -0.220 2016-05-27T00:
Oil Nymex 49.3 -0.150 2016-05-27T00:
Silver Index 16.3 -0.070 2016-05-27T00:

Indices

Symbol Open High Last %
NZX 50 6948.8 6996.2 6947.9 0.64%
NASDAQ 4904.1 4933.5 4901.8 0.65%
DAX 10257.9 10298.8 10272.7 0.13%
DJI 17826.8 17873.2 17828.3 0.25%
FTSE 6265.6 6275.9 6265.6 0.08%
HKSE 20425.0 20620.2 20397.1 0.88%
NI225 16830.5 16901.1 16772.5 0.37%
ASX 5388.1 5427.7 5388.1 0.33%