The New Zealand dollar was stuck within a 15-point range against the greenback as global markets await a meeting of the leaders of the US and China at the G20 meeting this weekend.

The kiwi was trading at 66.81 US cents at 5pm in Wellington from 66.80 cents at 7:55am. The trade-weighted index was at 72.96 from 72.92.

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The kiwi got a solid lift on Wednesday when the central bank kept rates on hold at 1.50 per cent. It added to its gains as optimism about a possible trade agreement between the US and China gained ground overnight.

President Donald Trump and China's President Xi Jinping are slated to meet at the G20 summit in Japan after months of rising tensions and retaliatory tariffs from both sides.


The two nations have agreed to a "tentative truce" before the summit, the South China Post reported, citing sources familiar with the situation. It also said fresh tariffs are expected to be delayed.

Overnight, markets were cheered when US Treasury Secretary Steven Mnuchin said the two nations were about 90 per cent of the way toward a deal.

"The G20 is going to set the tone for all markets and we will likely continue to tread water ahead of that," said Mark Johnson, private client manager at OMF.

He noted the kiwi also shrugged off ongoing weak domestic business confidence as the US-China trade situation dominates.

According to the latest ANZ Business Outlook, a net 38.1 per cent of the 376 respondents expect general business conditions will deteriorate during the coming year, up from 32 per cent in May.

"The outlook for the economy is murky," ANZ chief economist Sharon Zollner said.

The kiwi was trading at 95.50 Australian cents from 95.55. It was at 52.66 British pence from 52.62, at 58.83 euro cents from 58.75, at 72.18 yen from 72.01, and at 4.5957 Chinese yuan from 4.5946.

The New Zealand two-year swap rate was at 1.3383 per cent from 1.3118 late yesterday, while the 10-year swap rate was at 1.7975 per cent from 1.7375 per cent.


BNZ Bank said that, given the market is now pricing in an official cash rate of 1.0 per cent, "we expect the two-year swap to be range-bound near term unless the global outlook changes materially."

BNZ economists see a growing risk of even deeper rate cuts. Longer term rates, meanwhile, are "at the mercy of global rates."