"Our currency's probably going to be marooned for a bit in tight ranges" until a US-China deal is actually signed, says Martin Rudings, an adviser at OMF.
If that eventuates, both equities and the US dollar are likely to benefit, he says.
Overnight, New Zealand time, US President Donald Trump said the two countries are in the "final throes" of hashing out a deal.
That was after US Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He discussed progress in the talks in a phone call Monday.
The two sides reached consensus on how to resolve core concerns, China's Commerce Ministry said in its official readout of the call.
Meanwhile, Powell said that US monetary policy is now "well-positioned to support a strong labour market" and return inflation to the Fed's 2 per cent target.
"At this point in the long expansion, I see the glass as much more than half full."
In New Zealand, the Reserve Bank decided to leave its loan-to-value ratio restrictions in place on bank mortgage lending when it released its latest financial stability report.
Rudings says another rate cut in New Zealand is also looking less likely and the market has priced in only a 24 per cent chance RBNZ will cut its official cash rate when it next reviews monetary policy on February 12.
By contrast, the market is pricing in a 66 per cent chance of the Reserve Bank of Australia cutting its cash rate in February, he says.
The New Zealand dollar was trading at 94.72 Australian cents from 94.64, at 58.34 euro cents from 58.28, at 50 British pence from 49.96, at 4.5185 Chinese yuan from 4.5187, and at 70.12 yen from 70.08.
The two-year swap rate edged down to a bid price of 1.1124 per cent from 1.1335 per cent yesterday while 10-year swaps fell to 1.4575 per cent from 1.4700 per cent.
