The New Zealand dollar traded in a relatively narrow range on Monday ahead of the December quarter Consumer Price Index report on Wednesday and retail sales data on Thursday.
"This week is a heavy duty one New Zealand data wise," Westpac said in a commentary.
The Reserve Bank of New
Zealand expects a 0.2 per cent rise in inflation in the fourth quarter to an annual rate of 2 per cent.
The NZ dollar traded as high as US74.40c last week before retreating in a market moving around on changing investor perceptions of global risk. It was at US73.57c at 5pm today as investors were unimpressed by plans last week to slash the Greek budget deficit. It was US73.84c at 5pm on Friday.
The NZ dollar equalled 21-month high levels against the euro early on Saturday of 0.5143 euro, as the European currency was pressured by concerns about the Greek economy. It was 0.5120 euro At 5pm today from 0.5116 at 5pm on Friday. The euro fell to its lowest level in four months against sterling during trading in Asia today.
"The NZ dollar against the euro is overbought and shows waning momentum, signalling a downward correction for the week ahead," Westpac said. But a break above 0.5150 euro is also seen as possible.
"We expect further negativity on the news front as Greece struggles to convince the markets of its three-year plan to reduce the fiscal deficit and maintain a steady hand going forward," Westpac said.
The US dollar gained against most major currencies, helped by US reports indicating a rise in manufacturing alongside stable consumer price inflation. High-yielding currencies like the NZ dollar are also under pressure from profit-taking.
ANZ bank said disappointing results at US bank JP Morgan Chase delivered to the market on Friday night, caused a sell off in the equity market and took the NZ dollar lower.
US markets will be reduced on Monday for the Martin Luther King Day holiday.
The NZ dollar was down to 66.87 yen at 5pm from 67.30 at 5pm on Friday, but gained on the Australian dollar to A79.88c from A79.58c. The trade weighted index was down to 66.61 at the local open from 66.69.
- NZPA
