The New Zealand dollar was little changed above 83 US cents after testing the upper limits of its recent trading range as traders await this week's meeting of Federal Reserve policymakers.
The kiwi dollar traded at 83.36 US cents from 83.31 cents at 5pm in Wellington yesterday. It earlier reached 83.53 cents, a level it hasn't seriously breached since March. The trade-weighted index fell to 74.57 from 74.64.
The New Zealand dollar got a lift yesterday after Fonterra Cooperative Group raised its milk payment forecast and manufacturing data printed stronger than some economists had expected.
Currency markets generally held within their trading ranges overnight as traders pondered the prospects of more quantitative easing from the Fed and awaited any signs of progress in Washington on the fiscal cliff.
"Currency markets are suffering somewhat from subdued volumes and a lack of conviction as investors look ahead to Wednesday morning's FOMC decision," said Mike Jones, strategist at Bank of New Zealand. "
This week holds mainly second-tier economic data in New Zealand, starting with electronic card transactions today and "a cautious recovery theme is expected to prevail," Jones said.
The kiwi dollar was little changed at 79.51 Australian cents. It fell to 64.44 euro cents from 64.58 cents and dropped to 51.87 British pence from 51.96 pence. The local currency fell to 68.63 yen from 68.70 yen.