Monday 29th July 2013
|Text too small?|
The New Zealand dollar was little changed in local trading as investors await a slew of US economic data and the Federal Reserve's latest update on monetary policy.
The kiwi traded at 80.78 US cents at 5pm in Wellington from 80.75 cents at 8am and 80.84 cents on Friday in New York. The trade-weighted index was 75.93 from 76.02 last week.
Federal Open Market Committee members will review US monetary policy in a two-day meeting on July 30 and 31, as they weigh up the recovery of the world's biggest economy and whether to start unwinding their stimulus. Chairman Ben Bernanke has previously said the bank may start slowing its pace of monthly asset purchases if things continue to improve. That means US employment figures, second-quarter growth and a manufacturing survey this week will be keenly watched by the market this week.
"We expect the US data will be a bit stronger than what the market does, and overall that should support the US dollar," said Peter Dragicevich, currency strategist at Commonwealth Bank of Australia in Sydney. "The kiwi should drift a little lower this week."
A BusinessDesk survey of 10 traders and strategists predicts the local currency may trade between 78.60 US cents and 82.30 cents this week. Seven expect the New Zealand dollar to rise and three are picking a fall.
CBA's Dragicevich said the kiwi may outperform against the British pound and euro this week with the European Central Bank and Bank of England also reviewing monetary policy, and likely to keep a dovish tone.
"The RBNZ will be one of the first, if not the first, major central banks to hike rates, albeit next year," which is feeding into support for the kiwi, he said. Traders are pricing in 61 basis points of increases to New Zealand's 2.5 percent official cash rate over the coming 12 months, according to the Overnight Index Swap curve.
The local currency traded at 60.83 euro cents from 60.87 cents last week and 52.51 British pence from 52.55 pence. It fell to 79.02 yen from 79.45 yen last week and traded at 87.27 Australian cents from 87.22 cents.
No comments yet
MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite