NZ dollar little changed in narrow range as Fed, growth data awaited

The kiwi dollar traded at 69.21 US cents as at 8am in Wellington from 69.20 cents late yesterday.
The kiwi dollar traded at 69.21 US cents as at 8am in Wellington from 69.20 cents late yesterday.

The New Zealand dollar was little changed, remaining in a narrow range of about 0.6 of a US cent that it first entered a week ago, with markets seemingly unwilling to move the currency until the Federal Reserve's rate hike intentions are known tomorrow.

The kiwi dollar traded at 69.21 US cents as at 8am in Wellington from 69.20 cents late yesterday. The trade-weighed index was at 75.90 from 75.83.

See live rates for the NZ-US $ below. Click for more information:NzForex Foreign Exchange Transfers

Currency markets were relatively subdued overnight despite weaker equities and crude oil, figures showing a rise in US producer prices (PPI) in February, and a decline in Chinese retail sales for February. Along with the results of the Fed's two-day meeting tomorrow morning NZ time, traders will be awaiting the results of Dutch elections, any developments on Brexit and New Zealand gross domestic product tomorrow, expected to show growth slowed in the fourth quarter.

"Stronger than expected US PPI data didn't generate significant market movement, but reinforces inflation is on the rise," said Doug Steel, senior economist at Bank of New Zealand, in a note. "Positive growth signals and rising inflation simply underscores the case for the Fed to hike rates tomorrow."

Traders don't expect much market reaction to fourth-quarter current account data this morning, expected to show the deficit accounted for 2.7 per cent of GDP, down from 2.9 per cent three months earlier. US February consumer price index and retail sales figures are due out tonight, while Australian employment data and policy statements from both the Bank of Japan and the Bank of England will also be closely watched this week.

"Tomorrow could prove more turbulent," Steel said.

The kiwi dollar rose to 65.20 euro cents from 64.96 cents late yesterday. It was at 91.51 Australian cents from 91.54 cents and 4.7859 yuan from 4.7852 yuan. It traded at 79.40 yen from 79.42 yen and rose to 56.94 British pence from 56.72 pence.

- BusinessDesk

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