The New Zealand dollar largely tracked sideways as markets remain cautious ahead of upcoming data both here and in Australia.

The kiwi was trading at 66.20 US cents at 5pm in Wellington versus 66.13 late Friday in New York.

The trade-weighted index was at 72.43 from 72.41.Currency markets "feel like they are still kind of in holiday mode.

"They haven't settled on any major themes for the year," said Mike Houlahan, senior manager at XE.com.

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He said the New Zealand market may well tread water ahead of the Reserve Bank of Australia decision.

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The RBA next meets on February 4 after cutting the cash rate from 1.5 per cent to 0.75 per cent last year.

"That will be the first main focus for our part of the world. Do they cut interest rates to try and help the economy through the bushfires or do they think they have done enough and really its up to government spending to take up the slack in terms of boosting the economy?" he said.

Ahead of that, markets will be watching for Australian jobs data, due on Thursday, and New Zealand's inflation data on Friday.

He noted, however, the Aussie jobs data tends to be erratic and the kiwi's inflation data is unlikely to move the dial for the RBNZ ahead of its February 12 monetary policy review.

A Bloomberg poll showed the median expect 0.4 per cent quarter-on-quarter increase in CPI in the fourth quarter, with annual inflation ticking up to 1.8 percent.

The RBNZ forecast December quarter inflation would lift 0.2 per cent and annual inflation would be 1.6 per cent.Houlahan said the pound may also be fairly volatile as the UK heads toward the official January 31 Brexit date.

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He said the Bank of England looks to be leaning toward an interest rate cut and noted the UK has traditionally used the weaker currency to help support the economy. They may opt to "let the pound be a bit shorter and allow that to help the economy through the transition." It is due to make a decision January 30.

The kiwi traded at 50.91 British pence from 50.94 late Friday in New York. The New Zealand dollar was trading at 96.19 Australian cents from 96.32 late Friday, at 59.67 euro cents from 59.70, at 72.95 yen from 72.96 and at 4.5343 Chinese yuan from 4.5433.

The two-year swap rate traded at a bid price of 1.1875 per cent from 1.2049, while 10-year swaps were at 1.6475 per cent from 1.6750.