By Tina Morrison
The New Zealand dollar has fallen, lagging behind other commodity currencies as traders are wary the Reserve Bank may emphasise its willingness to ease monetary policy when it meets this week.
The kiwi slid to US64.76 cents at 8am on Monday in Wellington, from US64.90c at the New York close and US65.24c at 5pm on Friday.
The trade-weighted index fell to 71.51 from 71.98 on Friday.
The US dollar index, which measures the greenback against a basket of currencies, gained as global equities and oil prices improved, renewing market appetite for riskier assets.
However the kiwi lagged behind other commodity-linked currencies as traders eye this week's Reserve Bank meeting, where governor Graeme Wheeler's bias may be leaning more towards future interest rate cuts amid continuing weak inflation.
"The New Zealand dollar eased back under 0.65 (US cents) despite markets boosting equities, commodities and yield to end the week on a positive note," said ANZ Bank New Zealand senior foreign exchange strategist Sam Tuck.
"Markets are looking forward to this week's RBNZ (statement) with markets discussing an RBNZ return to an explicit easing bias."
However, he said the RBNZ already had an easing bias, given it communicated only one-sided risks in its December statement by warning it would reduce rates if circumstances warrant.
"We expect the RBNZ to remain on the same footing, watching with a cautious outlook," Tuck said.
Wellington has a public holiday today.
In the morning, the New Zealand dollar fell to 92.46 Australian cents from A93.17c on Friday, slid to 59.95 euro cents from 60.16c, dropped to 45.34 British pence from 45.91p, declined to 4.2604 yuan from 4.2916 yuan and was unchanged at 76.84 yen.