The New Zealand dollar was little changed and has traded in a narrow range ahead of the latest GlobalDairyTrade auction, Reserve Bank of Australia rates review and labour market data at home and in the US.
The kiwi traded at 71.47 US cents as at 8am in Wellington from 71.51 cents late yesterday. The trade-weighted index was at 77.01 from 77.07.
Another gain in the price of whole milk powder could push the price to its highest level since March 2015 after a 2.9 per cent gain in the last auction two weeks ago.
OMF expects an increase of 5 per cent-plus for whole milk powder and the GDT index.
A recovery in dairy products provides another prop for a New Zealand economy that is being underpinned by record migration and a housing market boom. No change in interest rates is expected out of the Reserve Bank in Australia today.
"NZX dairy futures for whole milk powder have risen by over 6 per cent over the past fortnight, supported by the outlook for lower NZ dairy production," said Jason Wong, currency strategist at Bank of New Zealand, in a note.
"Today's RBA meeting is expected to offer no hints of further easing at this juncture and there is likely to be more interest in the running of the Melbourne Cup than the policy statement."
Labour market data on Wednesday is expected to show the jobless rate fell to 5 per cent in the third quarter from 5.1 per cent, while employment growth slowed to 0.8 per cent, according to UBS. Labour costs probably remained subdued.
NZX dairy futures for whole milk powder have risen by over 6 percent over the past fortnight, supported by the outlook for lower NZ dairy production.
The Reserve Bank of New Zealand will also be considering its latest quarterly survey of expectations out this week, which will show the extent to which low inflation expectations are becoming entrenched ahead of its monetary policy statement on Nov. 10, which is expected to include a cut to the official cash rate.
The odds of the RBNZ cutting the official cash rate to 1.75 per cent at its Nov. 10 monetary policy statement are 80-85 per cent, based on interest rate swaps.
The kiwi fell to 58.40 British pence from 58.68 pence late yesterday and slipped to 65.09 euro cents from 65.20 cents. It fell to 93.89 Australian cents from 93.99 cents and slipped to 4.8397 yuan from 4.8415 yuan. The local currency traded at 74.90 yen from 74.97 yen.