The New Zealand dollar edged lower in light trading due to the US Veterans Day holiday, ahead of speeches by Federal Reserve officials which may bolster the case for a US interest rate hike and push the greenback higher.
The kiwi declined to 65.55 US cents at 8am in Wellington, from 65.81 cents at 5pm yesterday. The trade-weighted index slipped to 71.58 from 71.78 yesterday.
The US dollar index, which measures the greenback against a basket of currencies, has gained 2 percent so far this month after Fed officials signalled US interest rates could rise in December and following better-than-expected US employment data. In the US today, traders will be looking for further confirmation that the Fed is eyeing a potential rate hike in speeches by Fed chair Janet Yellen, vice chair Stanley Fisher, New York Fed president Bill Dudley, St Louis Fed president James Bullard, Richmond Fed president Jeffrey Lacker, and Chicago Fed president Charles Evans.
"Moves overnight were relatively shallow as the US is on holiday so volumes were lower," said Stuart Ive, OMF senior dealer, foreign exchange. "We have a fistful of US Fed speakers tonight. If they are to mention monetary policy out of the US it's only going to be in one direction and that is that they are probably looking to move in December. The market will be reacting to any monetary policy comments, clearly."
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