Analysts are split on the direction of the New Zealand dollar this week as they weigh whether local data is likely to prompt Reserve Bank governor Graeme Wheeler to keep interest rates on hold or lean towards future cuts.

The kiwi may trade between 64.50 US cents and 68.25 cents this week, according to a BusinessDesk survey of eight currency analysts.

Four bet the currency would remain largely unchanged while two picked it would rise and two that it would fall. It recently traded at 66.43 US cents.

In his annual scene setter speech earlier this month, Governor Wheeler signalled that he won't rush to cut interest rates and is prepared to look beyond weak headline inflation.

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This week is set to highlight divisions in the local economy, with record tourism expected to deliver strong fourth-quarter retail sales, while weakness is likely in inflation expectations and in dairy prices, the country's largest export commodity.

"There are a number of local events that will be closely watched as they have the potential to influence the Reserve Bank of New Zealand's interest rate outlook," ASB Bank economist Kim Mundy said in a note.

For retail sales data this morning, "a strong result will likely make the RBNZ comfortable in its view that the official cash rate can remain on hold, in the near term at least," Mundy said. "On the other hand, inflation expectations (this afternoon) and GlobalDairyTrade (auction tonight) may throw some doubt over the RBNZ's resolve to keep rates on hold."

The NZX futures market shows the price for New Zealand's key dairy product, whole milk powder, looks set to fall 10 percent, following a 10.4 percent drop at the previous fortnightly auction, which "is also likely to cause some concern for the RBNZ", Mundy said.

Fonterra Cooperative Group, the world's largest dairy exporter and New Zealand's biggest company, last month cut its 2015/16 forecast milk payout for farmers to $4.15 per kilogram of milk solids, from a previous estimate of $4.60/kgMS.

Should prices decline again at auction this week, ASB will likely lower its milk price forecast for the current season and next season, Mundy said. ASB currently expects $4.10/kgMS for this season, while ANZ Bank New Zealand has reduced its estimate to $3.95/kgMS, and Westpac Banking Corp has cut its forecast to $4/kgMS.

Musings from other central banks also have the potential to sway the kiwi this week.

The US Federal Reserve will publish the minutes to its last meeting on Thursday morning New Zealand time, which will be closely watched for hints as to the pace of future rate hikes. Australia's central bank will today publish the minutes to its most recent meeting while the European Central Bank releases its most recent meeting minutes early on Friday morning.

Central bank officials from the US, Australia, Europe, the UK and Japan are also scheduled to make public speeches this week, which could give hints to future policy.

Key data releases this week include Chinese trade and inflation, Australian employment, German business sentiment, UK inflation and employment, and US manufacturing and inflation.

- BusinessDesk