The New Zealand dollar fell ahead of the outcome of this week's two-day meeting by Federal Reserve policymakers, which is expected to result in the first of a series of rate hikes this year.
The kiwi dollar traded at 69.20 US cents as at 8:30am in Wellington from 69.35 cents late yesterday. The trade-weighed index fell to 75.79 from 75.93.
Markets are widely expecting the US Federal Open Market Committee to lift the fed funds rate a quarter point to a range of 0.75 per cent to 1 per cent, narrowing the gap with the Reserve Bank's 1.75 per cent rate which the New Zealand bank has projected to remain on hold. Gross domestic product figures this week are expected to show the pace of New Zealand economic growth slowed in the fourth quarter, although markets are likely to be more focused on overseas events including US retail sales and the Dutch election.
"Markets have been subdued ahead of major events scheduled later in the week," said Doug Steel, an economist at Bank of New Zealand, in a note. "Our fair value estimates and elevated risk appetite still favour the NZD higher, but it will first need to navigate Thursday's GDP data that we expect to be weaker than market expectations."
The kiwi dollar traded at 64.94 euro cents from 64.83 cents yesterday. It fell to 91.34 Australian cents from 91.61 cents. It rose to 4.7821 yuan from 4.7900 yuan and slipped to 79.45 yen from 79.61 yen. The kiwi fell to 56.60 British pence from 56.94 pence amid market talk that Britain may soon trigger Article 50 to begin the nation's exit from the European Union.