NZ dollar trades in narrow range, focus on Bank of Japan

Tuesday 22nd January 2013

The New Zealand dollar was trading in a narrow range as traders waited for direction on Japanese monetary police and for US markets to gear up again after the Martin Luther King holiday.

The kiwi was at 83.63 US cents at 8am on Tuesday, little changed from 83.60 cents at 5pm on Monday.

The currency traded in a relatively narrow range overnight due to the holiday in US markets and inauguration of President Barack Obama, one dealer said.

He said statements by the Bank of Japan later today were expected to be main event in markets today.

Economists in a Bloomberg News survey expect the central bank to expand asset purchases after a two-day meeting ends today.

The kiwi was at 75.06 yen at 8am from 74.95 at 5pm on Monday.

Further stimulus in Japan may weaken the yen more but strategists say traders are holding large short yen positions and the yen could rise on profit-taking.

Otherwise equities in Europe advanced as Germany's central bank said the nation's economy is showing signs of recovery in the first quarter of the year.

The Bundesbank forecasts the German economy to grow 0.4 percent in 2013 year and 1.9 percent in 2014. Europe's largest economy contracted 0.5 percent in the fourth quarter of 2012, data last week showed.

The kiwi was at 79.52 Australian cents from 79.50 Australian cents at 5pm on Monday.

It was 62.80 euro from 62.77 euro and 52.84 British pence from 52.69 pence.

The trade-weighted index was little changed at 75.21 from 75.14 on Monday.

BusinessDesk.co.nz

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