NZ dollar little changed

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The New Zealand dollar was little changed, after testing its highest levels in almost two years last week on a trade-weighted basis, as traders awaited December trade data today, and labour market figures and the Federal Reserve statement on Wednesday.

The kiwi traded at 72.70 US cents as at 8am in Wellington, from 72.62 cents in late New York trading on Friday and 72.45 cents in Wellington at the end of last week.The trade-weighted index was at 79.60 from 79.58, having reached 79.76 last week, the highest since April 2015.

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Markets didn't react much in subdued New Zealand trading, with Auckland on holiday, to the biggest news over the weekend - chaos at US airports and anger from world leaders over US President Donald Trump's temporary ban on travellers from seven Muslim-majority countries. In New Zealand today, figures are expected to show a small trade deficit for December, while labour market data on Wednesday may show the jobless rate held below 5 per cent. The Federal Open Market Committee isn't expected to change US interest rates at the end of its two-day meeting but may give an indication of its timing for a hike.

"The Fed's FOMC meeting is most eagerly anticipated by the market," said Doug Steel, an economist at Bank of New Zealand, in a note. "Will the Fed hint at a March rate rise? The market currently prices a 72 per cent chance of a Fed hike in March, with a 25 basis point hike more than fully priced by June."

Steel said the kiwi may trade in a range of 72.20 US cents to 73.10 cents today.

The kiwi fell to 95.98 Australian cents from 96.23 cents in New York on Friday. It traded at 4.9919 yuan from 4.9946 yuan and fell to 67.73 euro cents from 67.89 cents. It traded at 57.76 British pence from 57.88 pence last week and fell to 83.31 yen from 83.58 yen.