NZ dollar drifts lower in thin overnight trading

The kiwi fell to 83 59 US cents at 8am in Wellington from 83.72 cents at 5pm yesterday in light trading during the Presidents' Day holiday.
The kiwi fell to 83 59 US cents at 8am in Wellington from 83.72 cents at 5pm yesterday in light trading during the Presidents' Day holiday.

The New Zealand dollar drifted lower overnight in thin trading as US markets were closed for a public holiday.

The kiwi fell to 83 59 US cents at 8am in Wellington from 83.72 cents at 5pm yesterday in light trading during the Presidents' Day holiday. The trade-weighted index was unchanged at 78.40.

"Over a largely quiet overnight session, the New Zealand dollar drifted lower along in tandem with the Australian dollar, with no clear drivers at play," Bank of New Zealand currency strategist Raiko Shareef said in a note. "The Reserve Bank of Australia (board) minutes are due this afternoon, which may provide some direction for the New Zealand dollar."

The Australian dollar has strengthened about 3 per cent against the US dollar so far this month as the RBA dropped its bias towards easing interest rates and softened its comments about the strength of the nation's currency. New information from the minutes may be limited because the central bank released its Statement of Monetary Policy last week.

The New Zealand dollar advanced 92.51 Australian cents from 92.44 cents yesterday ahead of the release of the February minutes at 1:30pm.

In the US, the main focus tonight will be the New York Empire manufacturing survey and the National Association of Home Builders housing sentiment index.

"Any weakness would lead to US dollar selling," ANZ Bank senior economist Mark Smith and senior FX strategist Sam Tuck said in a note.

The kiwi slipped to 60.95 euro cents from 61.05 cents and advanced to 50.02 British pence from 49.85 pence ahead of the release of the UK's January inflation figures.

The New Zealand dollar rose to 85.17 yen from 85.03 yen yesterday after a report showed Japan's economy grew at an annual 1 per cent pace in the final quarter of 2013, less than the 2.8 per cent pace expected, boosting speculation the central bank may add more stimulus which weakens the currency. Still, the Bank of Japan isn't expected to change policy when it meets today, ANZ said.

- BusinessDesk

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