The New Zealand dollar was little changed as investors questioned whether the Federal Reserve will hike interest rates next month, with holidays in the US and UK keeping a lid on trading volumes.

The kiwi traded at 66.91 US cents at 8am in Wellington from 66.84 cents yesterday. The trade-weighted index was unchanged at 72.35.

US markets were closed for the Memorial Day holiday and the UK was closed for a Spring bank holiday, leaving trading relatively quiet. Traders continued to focus on the Fed's meeting next month after chair Janet Yellen told an audience on Friday that the next decision was "live".

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That's prompted traders to price in a 36 percent chance of an increase at the next meeting, up from less than 5 percent in the middle of May, something St Louis Fed president James Bullard yesterday said wasn't surprising given the central bank's goal of trying to gradually normalise rates over time.

"The USD is firmer than prior to Yellen's comments, European and Asian equity values have continued to advance and the government bond market has not yet spat the dummy, although this will be tested when the US rates market reopens tonight.

None of this provides warning signs yet for the Fed," ANZ Bank New Zealand economist Mark Smith and FX strategist Sam Tuck said in a note. "ANZ business confidence today will be a key read for kiwi, but the kiwi will still mostly be driven by US data flow which begins to pick up tonight, with US consumer confidence, personal income/spending, and the Chicago PM."

Smith and Tuck predict the kiwi will trade between 66.60 US cents and 67.60 cents today.
Government figures on April building consents and the ANZ Business Outlook survey are scheduled for release today.

The local currency fell to 93.04 Australian cents from 93.34 cents yesterday ahead of Australian first-quarter gross domestic product data tomorrow, and the kiwi slipped to 60.04 euro cents from 60.20 cents yesterday after German inflation and European Union confidence came in just ahead of expectations.

The New Zealand dollar gained to 74.33 yen from 73.84 yen yesterday and increased to 4.4027 Chinese yuan from 4.3991 yuan. It was little changed at 45.70 British pence from 45.73 pence yesterday.