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NZ dollar little changed as central bank views, euro developments awaited

Tuesday 21st August 2012

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The New Zealand dollar was little changed after what traders called "summer doldrums" in Northern Hemisphere markets ahead of central bank reports downunder today and the minutes of the Federal Reserve's last policy meeting on Wednesday in the US.

The kiwi traded at 80.86 US cents from 80.92 cents at 5pm in Wellington yesterday. The trade-weighted index was at 72.98 from 73.04.

The Reserve Bank of New Zealand releases its survey of expectations today, which will show how much inflation pressures are perceived in the local economy, while Australia's central bank releases the minutes of its latest meeting. On Wednesday in Washington, the Federal Open Market Committee meeting minutes are released.

"I don't think anything great will come out of the RBA or RBNZ, unless the RBA talks down the Australian dollar," said Tim Kelleher, head of institutional FX sales at ASB Institutional. If the Fed tomorrow "maintains the path of no more QE3, we could see a selloff in equities."

Kelleher said the New Zealand dollar may trade in a range of 80.60 US cents to 81 cents today.

The kiwi dollar traded at 77.38 Australian cents, little changed from 77.37 cents yesterday. It fell to 65.49 euro cents from 65.63 cents after Germany's Bundesbank criticised the European Central Bank's plan for government-bond purchases, showing the region is divided on how to move forward on tackling its debt crisis.

The New Zealand dollar fell to 64.18 Japanese yen from 64.30 yen and traded at 51.47 British pence from 51.55 pence.

BusinessDesk.co.nz

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