The New Zealand dollar is headed for a 1 per cent fall against the greenback this week as worries about global growth cast a pall over markets.

The kiwi traded at 68.06 at 5pm in Wellington versus 68.11 US cents at 8am and late yesterday. It was at 68.76 US cents last Friday in New York. The trade-weighted index was at 74.25 from 74.34 yesterday.

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Markets have been increasingly concerned that the ongoing trade dispute between China and the US will have an impact on global growth, which has weighed on risk appetite.

The focus is now firmly on the G20 meeting in Argentina next week as President Donald Trump and China's President Xi Jinping prepare to meet, said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.


Kelleher said that while markets are jittery, sentiment has improved slightly after Trump on Thursday said he hoped he can make a deal when he meets Xi. That is helping keep the kiwi supported and if it holds about 67.50 US cents, it could grind higher, he said.

He also noted that while the US Federal Reserve is widely expected to hike rates in December, investors are now pulling back on expectations for next year as they fret about a possible US slowdown. That is also New Zealand dollar positive, he said.

A draft deal between Britain and the European Union on future relations has also helped sentiment although there are still hurdles to get through, including the deeply divided British parliament. The pound, however, gained on the news and the kiwi traded at 52.84 British pence from 53.28 pence yesterday.

The kiwi increased to 4.7230 Chinese yuan from 4.7182 yuan yesterday and was at 76.85 yen from 76.93 yen. It traded at 93.81 Australian cents from 93.92 cents yesterday and was at 59.62 euro cents from 59.76 cents.

New Zealand's two-year swap rate fell 1 basis point to 2.12 per cent; the 10-year swaps were down 1 basis point at 2.97 per cent.