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NZD dollar sticks to tight range, eyes on RBA

Tuesday 5th March 2019

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The New Zealand dollar remains stuck in a tight range ahead of key events this week, including the Reserve Bank of Australian monetary policy review later today.   

The kiwi was trading at 68.18 US cents at 8am from 68.15 US cents at 5pm in Wellington and the trade-weighted index was at 73.94 points from 73.79.

The New Zealand dollar is "in a holding pattern" and the US dollar has a slightly firmer tone, said ANZ FX/rates strategist Sandeep Parekh.   On the day, investors will be watching for the Reserve Bank of Australia's rate decision. While the central bank is widely expected to stay on hold "language will be important," said Parekh.  The RBA surprised markets last month by switching to a more neutral tone, essentially putting an eventual rate cut back on the table.  Australian fourth quarter gross domestic product data Wednesday will also be watched. 

The New Zealand dollar was trading at 96.19 Australian cents from 95.99 Australian cents.

The focus will then shift to US jobs data later in the week as the market looks for a steer on when the US Federal Reserve might move to lift rates again. 

Attention will also be on China's National People's Congress, said Marshall Gittler, chief strategist at ACLS Global. He noted the Congress lasts for 10 days, during which there are a lot of press conferences by the various ministries, including the People’s Bank of China, that could be market-affecting.

The non-farm payrolls data for February is expected to show the US added 175,000 new jobs in the month and the unemployment rate fell to 3.9 percent, according to Westpac Bank.  That’s after the 304,000 new jobs added in January, much greater than the forecast 165,000.

The kiwi was at 51.75 British pence from 51.46 British pence and at 60.13 euro cents from 59.95 euro cents. It was at 76.16 yen from 76.30 yen and  4.5718 Chinese yuan from 4.5582.


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