Kiwi gains at start of risk-heavy week with central banks, US jobs

The New Zealand dollar gained at the start of what is shaping up to be a risk-heavy week, with central bank meetings and US employment figures threatening to disappoint investors after some weaker than expected early indicators.

The kiwi rose to 85.22 US cents at 5pm in Wellington from 84.80 cents at 8am and 84.75 cents on Friday in New York. The trade-weighted index advanced to 78.47 from 78.24.

The transTasman currencies recovered some losses from Friday after US gross domestic product figures missed analysts' expectations.

That comes in a week where the Federal Open Market Committee and European Central Bank are scheduled to review monetary policy and will give updates on the economies of their respective regions.

US employment on Friday will also be seen as a barometer of America's well-being, with the Federal Reserve linking its monetary expansion to the jobless rate.

"It'll probably be a fairly dull first-half of the week, though it livens up in the second half with the ECB on Thursday and the FOMC on Wednesday," says Imre Speizer, market strategist at Westpac Banking Corp in Auckland.

"The kiwi's just above the middle of its range", with support at 83 US cents and resistance just below 87 cents.

He says the currency may continue its strong run against the Australian dollar, with the Reserve Bank of Australia seen as likely to cut rates, while New Zealand's central bank is viewed as more inclined to hike rates later this year.

The kiwi increased to 82.60 Australian cents from 82.43 cents last week.

A BusinessDesk survey of five strategists expects the kiwi will test the bottom of a range between 83 US cents and 86 cents this week.

Italy's Enrico Letta forged a coalition with the conservative party of former premier Silvio Berlusconi, providing some certainty after inconclusive elections earlier this year.

The kiwi rose to 65.30 euro cents from 65.04 cents on Friday in New York. It increased to 54.89 British pence from 54.74 pence in New York on Friday and gained to 83.20 yen from 83.08 yen.

(BusinessDesk)