Kiwi little changed after overnight gain on commodity price strength

The New Zealand dollar was little changed, having climbed overnight only to reverse track, as prices of crude oil and other commodities rose and traders looked ahead to tonight's dairy auction.

The kiwi traded at 68.76 US cents as at 8am in Wellington, after rising to 69.17 cents overnight, from 68.73 cents late yesterday. The trade-weighted index was at 74.82 from 74.88.

Oil futures rallied as Saudi Energy Minister Khalid Al-Falih and his Russian counterpart, Alexander Novak, met in Beijing and said that an agreement on production cuts should be extended through the first quarter of 2018. The CRB Index of 19 commonly traded commodities reached the highest in almost four weeks overnight before shedding some of its gains. However, whole milk powder futures traded on the NZX are pointing to a decline in the GlobalDairyTrade auction tonight, suggesting New Zealand's commodity exposure isn't as upbeat as for crude oil.

"Near-term direction may well be dictated by broader commodity price sentiment (oil bounced overnight), but particularly whether NZ's commodity basket can continue to outperform," said Philip Borkin, senior economist at ANZ Bank New Zealand, in a note.

Traders will also be watching for the release of the Reserve Bank of Australia's latest policy meeting minutes today.

The kiwi edged up to 53.33 British pence from 53.25 pence. The local currency slipped to 62.61 euro cents from 62.86 cents and gained to 78.23 yen from 77.91 yen. It traded at 92.73 Australian cents from 92.85 cents and fell to 4.7396 yuan from 4.7417 yuan.