NZD little changed in slow start to week

  • 14/03/2016

By Paul McBeth

The New Zealand dollar was little changed in a slow start to a week where investors will have to gauge US monetary policy, local economic growth and the latest dairy price auction.

The kiwi traded at 67.49 US cents at 5pm in Wellington from 67.16 cents at 8am and 67.50 cents on Friday in New York. The trade-weighted index gained to 71.95 from 71.51 last week.

A BusinessDesk survey of 12 analysts expects the local currency will trade between 65 US cents and 69 cents this week, with six predicting it will fall, five expecting little movement, and just one betting it will gain. The US Federal Reserve reviews monetary policy this week and investors will be watching to see whether policy makers will stick to their planned interest rate hiking cycle given the string of upbeat American data.

At the same time, the kiwi faces local event risk from an off-the-record speech by Reserve Bank governor Graeme Wheeler tomorrow, a GlobalDairyTrade auction on Tuesday in the US, fourth-quarter gross domestic product on Thursday and an earnings announcement from Fonterra that same day.

The Reserve Bank cut the official cash rate a quarter-point to 2.25 percent last week as cheap global oil feeds through to softer inflation expectations.

New Zealand's two-year swap rate increased one basis point to 2.27 percent at 5pm in Wellington, and 10-year swaps were up four basis points to 3.07 percent.

The local currency slipped to 88.95 Australian cents from 89.10 cents last week, and increased to 4.3823 Chinese yuan from 4.3757 yuan.

The kiwi gained to 76.83 yen from 76.68 yen last week ahead of the Bank of Japan's policy review on Tuesday, which is likely to sustain its stimulus package of quantitative easing and negative interest rates.

The local currency was little changed at 60.47 euro cents from 60.41 cents on Friday in New York, and traded at 46.92 British pence from 46.87 pence.