Kiwi holds below 73USc as Fed chair Powell testimony comes into focus
(BusinessDesk) - The New Zealand dollar held below 73 US cents as investors await Federal Reserve chair Jerome Powell's first testimony to Congress this week, where they'll be looking for clues on the track for US interest rates.
The kiwi traded at 72.85 US cents as at 8am in Wellington from 72.88 cents on Friday in New York, and down from 73 cents at the close of local trading last week. The trade-weighted index was unchanged at 74.84.
Powell will testify before the House of Representatives and Senate committees this week in his first semi-annual testimony on the monetary policy report, which was released on Friday. That affirmed his predecessor's view that future increases in the federal funds rate will be gradual with the economy at or near full employment. The yield on 10-year US Treasuries retreated to 2.87 percent as investors scaled back their expectations for more aggressive rate hikes, while the greenback and stocks on Wall Street gained.
"The market may have taken solace from the fact Powell doesn't appear to be shifting policy to the more hawkish market narrative," ANZ Bank New Zealand chief economist Sharon Zollner said in a note. "The USD has regained some poise of late, but this will be tested by their trade balance and new Fed chair Powell's view on how the economy is tracking."
There is no significant economic data scheduled for release today.
The local currency traded at 92.87 Australian cents from 92.89 cents on Friday in New York and was little changed at 4.6135 Chinese yuan from 4.6148 yuan. It traded at 52.11 British pence from 52.15 pence last week and was little changed at 59.23 euro cents from 59.27 cents. The kiwi was at 77.83 yen from 77.88 yen last week