The New Zealand dollar was steady as markets await a raft of key events tomorrow, including the results of the Federal Reserve's latest policy-setting meeting.

The kiwi was trading at 65.26 US cents at 5pm in Wellington from 65.25 at 7:45am in Wellington. The trade-weighted index was at 71.91 from 71.86.

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The US Federal Reserve is scheduled to release a statement early Thursday New Zealand time, followed by a press conference by chairman Jerome Powell shortly after.

The central bank is not expected to move interest rates but the statement and comments will be closely scrutinised for any clues on what may happen next. According to Reuters, futures are almost fully priced for a quarter-point easing in July and imply more than 60 basis points of cuts by Christmas.


"The Federal Reserve isn't immune to the global situation and are expected to at least signal rate cuts in the near future – perhaps July," said OMF treasury manager Stuart Ive. There is increasing concern about a global slowdown, in particular as US-China trade tensions continue.

While there were some overnight signs of optimism after US President Donald Trump confirmed the two nations' leaders will meet in Japan at the end of the month, markets remain jittery.

Domestically, investors will be watching for first-quarter gross domestic product data as a weak result will add to the view the New Zealand central bank will also move to cut rates again shortly.

The Fed statement is "the big ticket item tomorrow morning 6:00am NZT," Ive said. "GDP may or may not nudge traders' thoughts of further interest rate cuts in the near future in New Zealand."

Kiwibank trader Mike Shirley said the kiwi had been volatile during the day but in an almost 15-point range. He said the current account data earlier - which was largely in line with market expectations - has given it a small rally but "that gain was given back over the course of the afternoon."

Along with the Federal Reserve and the local GDP data, investors will be keeping an eye on a speech on the "labour market and spare capacity" from Reserve Bank of Australia governor Philip Lowe tomorrow afternoon.

In minutes explaining its June 4 decision to cut the cash rate from 1.5 per cent to 1.25 per cent, the RBA said the move should reduce spare capacity in the labour market, creating more jobs.

"Given the amount of spare capacity in the labour market and the economy more broadly, members agreed that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead," it said.


The New Zealand dollar was trading at 94.56 Australian cents from 94.90, at 51.96 British pence from 51.93, at 58.32 euro cents from 58.26, at 70.71 yen from 70.74, and at 4.5064 Chinese yuan from 4.5024.

The New Zealand two-year swap rate edged down to 1.3537 per cent from 1.3667 yesterday, while the 10-year swap rate eased to 1.7875 per cent from 1.8150.