The New Zealand dollar may rise this week if current optimism that Europe's leaders will fix the region's debt problems is borne out by events.

Five economists and market strategists surveyed by BusinessDesk said the kiwi, which was recently at 80.40 US cents, may trade in a range between 79.20 US cents and 81.50 cents this week, though some said the bottom of the range could be as low at 78.50 cents.

It is expected to trade between 76.80 Australian cents and 78.30 cents, having traded recently at 77.82 cents.

"People have been more comfortable with risk lately but it will only take a headline or two to set it off again," said Alex Sinton, senior dealer at ANZ Bank.

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The European Council meeting on October 23 is the main focus of traders. UK chancellor George Osborne said it will clearly be the moment when people expect something quite impressive, while the French finance minister Francois Baroin said it will be a make or break moment.

Imre Speizer, senior market strategist at Westpac, said the kiwi should be higher at least for the initial part of the week on continued optimism about Europe.

At around 81.50 US cents the currency was back at the bottom of the range where it was trading for much of September before it fell on concerns that Europe would not be able to resolve its problems.

"The main source of risk is not going to be kiwi data, people will be watching Europe unfold. By the end of this weekend's meeting we are going to know a lot more," Speizer said.

Once the plan to resolve Europe's problems becomes clear investors will assess how good the execution will be.

Mike Hollows, director of trading at HiFX, said there "is a bit of momentum to this thing."

Speculation that China might be going to underpin Europe also reinforced optimism.

The Sunday Times newspaper reported that China has made a "secret commitment" to prop up the crisis-hit eurozone in return for budget reforms and public sector cuts. The paper said Chinese officials had indicated that Beijing was willing to pump tens of billions into the eurozone to purchase infrastructure assets from debt-plagued nations.

"There are some encouraging signs and a level of confidence that the issues in Europe are being dealt with in a long-term way but while there are some encouraging signs I don't want to get carried away," Hollows said.

How 440 billion euro European Financial Stability Fund will be enhanced, however, is still unclear. The fund's impact could be boosted to 2 trillion euro if the fund only insures a certain amount of losses.

Prices at an online auction of milk powder by Fonterra this week are expected to rise, traders said.

It is a sparse week for local data. New Zealand's service industry expanded for an eighth month in September, with the pace slipping from August, with growth led by new orders.

The BNZ-Business New Zealand performance of service index (PSI) fell 0.6 points from August to 53.2 on a scale where 50 marks the divide between expansion and contraction.

Migration figures for September and the Labour Cost Index for the June quarter are due on Friday.

Investors are also awaiting earnings guidance from IBM on Monday in the US, followed by results from Apple, Coca-Cola and Intel on Tuesday.

Industrial production data is also due on Monday US time followed by producer and consumer inflation on Tuesday and Wednesday, respectively, and weekly jobless claims on Thursday.

BNZ said the focus may shift back to the US with speeches by Federal Reserve governor Ben Bernanke and other Federal Reserve members this week. The Fed's beige book on Wednesday will also be watched.