The New Zealand dollar advanced ahead of the Reserve Bank's decision on interest rates today, buoyed by a gain in commodity prices.
The kiwi rose to 67.86 US cents at 8am in Wellington, from 67.26 cents at 5pm yesterday. The trade-weighted index increased to 72.75 from 72.43 yesterday.
Commodity prices improved overnight, led by a gain in crude oil after the Energy Information Administration reported a rise in crude oil stockpiles that was in line with analysts' expectations while distillate and gasoline inventories fell significantly more than expected. That increased demand for commodity-linked currencies such as the Canadian, Australian and New Zealand dollars. Canada's central bank kept its benchmark interest rate on hold yesterday, and New Zealand's Reserve Bank is also expected to keep rates unchanged in its monetary policy statement due for release at 9am.
"The AUD and NZD appreciated while the CAD led gains, with oil rebounding and the Bank of Canada less dovish than expected," ANZ Bank New Zealand senior economist Sharon Zollner and markets economist Daniel Wilson said in a note. "The focus today will be on the RBNZ, and whether it opens the door further to the possibility of future easing. But we doubt cuts are yet part of its central scenario, which may disappoint some."
ANZ Bank expects the kiwi to range between 67.40 US cents and 69.40 cents today, and warned trading could be volatile.
Also scheduled for release today is the Real Estate Institute's monthly house sales data.
The New Zealand dollar advanced to 61.56 euro cents from 61.29 cents yesterday, gained to 47.71 British pence from 47.44 pence, increased to 76.83 yen from 75.77 yen, and jumped to 4.4174 yuan from 4.3811 yuan. It slipped to 90.31 Australian cents from 90.59 cents yesterday,