The New Zealand dollar drifted lower in the absence of fresh stimulus as the market continues to focus on the prospect of the US Federal Reserve cutting interest rates and the progress of the US-China trade war.

The New Zealand dollar was trading at 65.69 US cents at 5:05pm in Wellington from 65.81 at 7:50am. The trade-weighted index was at 72.09 points from 72.19.

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The kiwi's weakness was despite the US dollar hovering near 11-week lows amid the Fed rate cut speculation.

"The Aussie and the kiwi have dramatically underperformed," says Tim Kelleher, the head of institutional foreign exchange sales at Commonwealth Bank of Australia. But he says he can't point to a reason, other than liquidity.

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The New Zealand dollar shouldn't drift too much lower, though, because it has "reasonable support" at 65.50 US cents, he says.

While the market remains alert for further developments in the US-China trade war, particularly for new tweets from US President Donald Trump, there has been little in the way of new developments.

"Luckily he was in Iowa today visiting the farmers," Kelleher says.

And it probably won't be until China's President Xi Jinping turns up at the G20 meeting in Osaka later this month that the markets will get a better feel for what will happen, he says. Xi and Trump are supposed to meet while both are in Osaka.

However, "if you haven't got the Trump Twitter account up on your screen, you don't know what's going on," Kelleher says.

The kiwi was trading at 94.50 Australian cents from 94.57, at 51.64 British pence from 51.72, at 57.95 euro cents from 58.10, at 71.23 yen from 71.41 yen and at 4.5413 Chinese yuan from 4.5649.

The New Zealand two-year swap rate edged up to 1.4100 per cent from 1.4075 yesterday while the 10-year swap rate eased to 1.9025 per cent from 1.9175.