NZ dollar little changed in quiet trading as major markets closed for holidays

Tuesday 26th May 2015

The New Zealand dollar was little changed overnight with major markets in the US and the UK closed for public holidays.

The kiwi held at 73.05 US cents at 8am in Wellington, from 73.06 cents at 5pm yesterday. The trade-weighted index edged up to 76.04 from 75.98 yesterday.

Currency markets were subdued overnight with US markets closed for a Memorial Day holiday, while the UK market and much of Europe were closed for a Bank holiday.

"It was a quiet night overnight with the key US and UK markets closed" ANZ Bank New Zealand chief economist Cameron Bagrie and senior FX strategist Sam Tuck said in a note. "The New Zealand dollar moved in a sideways manner."

Today, traders are awaiting the latest New Zealand trade data, with economists in a Reuters poll expecting the monthly trade surplus narrowed to $100 million in April, from $631 million in March. The annual trade deficit is expected to widen to $2.79 billion in April from $2.41 billion in March.

The New Zealand Institute of Economic Research publishes its quarterly economic forecasts today, and the Reserve Bank releases April data on new residential mortgage lending within its loan to valuation limits.

Tomorrow, the focus will be on the outcome of Fonterra Cooperative Group's board meeting. The world's largest dairy exporter is expected to provide its first forecast for the upcoming 2015/16 season Thursday morning, with ANZ forecasting an opening milk price of between $5 per kilogram of milk solids and $5.25/kgMS, which it says will leave many dairy farm budgets in the red.

In the US tonight, traders will be eyeing data on durable goods orders, services PMI, and consumer confidence as they firm up expectations for when the Federal Reserve is likely to start raising interest rates.

The New Zealand dollar was little changed at 93.33 Australian cents from 93.32 cents yesterday, at 66.52 euro cents from 66.50 cents. It slipped to 88.76 yen from 88.88 yen yesterday and held at 47.21 British pence.

BusinessDesk.co.nz

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