The New Zealand dollar remained stuck in its recent range today, although a fall this week may be on the cards after expected cuts in Fonterra's dairy payout and Reserve Bank interest rates.
By 5pm, the kiwi was little changed at US52.84c from US52.86c late yesterday afternoon. Thecurrency had risen to US53.40c overnight before retreating.
The kiwi declined against the Aussie, to A79.79c from A80.78c yesterday afternoon. It was weaker against the euro and sterling, and steady against the yen.
For the last five days, the kiwi has been stuck in a US2c range capped by US53.70c, and was waiting for a catalyst to spark a bigger move.
"Exactly when that occurs is difficult to predict, but the expected direction is likely to be downwards, with the next support level at US50c," Westpac senior market strategist Imre Speizer said.
Fonterra's revised payout forecast tomorrow is expected to fall to $5.50 per kg of milksolids from November's forecast of $6/kg, compared with the season's original forecast of $7/kg.
Anything lower would see the kiwi sold off, Mr Speizer said.
On Thursday, the Reserve Bank is expected to slash its official cash rate by between 100 and 150 basis points from the current 5 per cent.
The yen slipped against the euro and sterling today as investors' appetite for risk improved after British bank Barclays said it would report a 2008 pretax profit and US data showed a rise in home sales.
Sterling gave up some of its recent gains against the US dollar, but remained well above 23-year lows hit late last week after data showed that Britain's economy shrank at its fastest pace since 1980.
