The New Zealand dollar remained in a tight trading range as financial markets await a key policy address by US President Donald Trump and a speech by Federal Reserve chair Janet Yellen at the end of the week. Locally, trade data and a business confidence survey may underline the strength of the NZ economy.
The kiwi traded at 71.97 US cents as at 8am in Wellington, from 71.94 cents late yesterday. The trade-weighted index was at 78.29 compared with 78.24.
The New Zealand dollar has been confined to a range of about 71.27 US cents to 72.46 cents for almost three weeks, with markets waiting for details of Trump's policy plans while weighing the chances that the Fed will hike rates as soon as next month. US Treasury Secretary Steven Mnuchin said last weekend that Trump will use a speech on Tuesday to outline tax cuts for companies and the middle class, a move that would be seen as a boost to the US economy.
"Trump has said that he will talk about his budget so the markets will be expecting greater granularity than has so far been forthcoming," said David Croy, senior rates strategist at ANZ Bank New Zealand. "With no sound reason to be strategically long or short, the NZD continues to range trade and is unlikely to stray too far until Fed chair Yellen's speech on Friday night."
Croy said New Zealand economic data this week "are likely to emphasise the story of an economy that is doing very well." New Zealand's merchandise trade deficit is expected to have narrowed to $3 million in January from $41m a month earlier. That's followed this afternoon by the ANZ business confidence survey.
The kiwi traded at 57.82 British pence from 57.89 pence late yesterday. It rose to 93.69 Australian cents from 93.55 cents and slipped to 67.94 euro cents from 68.10 cents. The kiwi rose to 81.11 yen from 80.71 yen and fell to 4.9377 yuan from 4.9468 yuan.