The New Zealand dollar kept to a tight range as markets await a series of events, in particular the results of the Federal Reserve's meeting due early Thursday New Zealand time.
The kiwi dollar traded at 69.31 US cents as at 5pm in Wellington versus 69.21 US cents as at 8am and 69.20 cents late yesterday. The trade-weighed index was at 75.97 from 75.83.
"The New Zealand dollar is chopping around a little bit but markets in general are waiting for the next 24 hours. We have plenty on the horizon," said ANZ Bank New Zealand senior economist Philip Borkin. While the Federal Reserve "is the first cab off the rank" markets will also be watching for the Bank of Japan, Bank of England, Swiss National Bank, local GDP data and Australian labour data and the Dutch elections. "There is plenty of event risk," he said.
The main focus, however, will be on what the Federal Reserve has to say "and whether they believe the upside risks to growth, which some of the members have been talking about of late, is enough to see their dot plot lift a little higher," said Borkin.
He said the Bank of Japan and the Bank of England are likely to be "more of a ripple than a wave" given the focus on the Fed, but there will be some interest in the Bank of England in particular given the amount of pressure the British Pound has been under as investors fret now that Prime Minister Theresa May has a green light to begin the formal Brexit process.
Domestically there will be some interest in the local gross domestic product data for the fourth quarter. Borkin said, however, any reaction is likely to be fleeting. He is expecting the GDP to print at 0.7 per cent on quarter and anything lower would be a reflection of poor spring weather conditions. "People will likely look through it and focus on broader issues rather than on what is a pretty historical number for New Zealand," he said.
The kiwi dollar traded at 65.29 euro cents from 64.96 cents late yesterday. It was at 91.56 Australian cents from 91.54 cents and at 4.7931 yuan from 4.7852 yuan. It traded at 79.60 yen from 79.42 yen and 57.02 British pence from 56.72 pence.
The two-year swap rate was unchanged at 2.31 per cent and the 10-year swaps were steady at 3.57 per cent.