The New Zealand dollar was little changed, having fallen to a new three-week low overnight, only to bounce back when minutes of the last Federal Reserve policy meeting showed the bank wants to reduce its balance sheet, which may ease pressure to hike interest rates.
The kiwi traded at 69.73
US cents as at 8am in Wellington, having fallen as low as 69.36 cents after a stronger than expected US jobs survey, from 69.72 cents late yesterday. The trade-weighted index was at 75.85 from 75.86 yesterday.
The New Zealand dollar broadly mirrored the greenback as it see-sawed overnight. The ADP survey of US private employment showed an increase of 263,000 jobs in March, the highest since December 2014 and ahead of estimates of 187,000.
The data stoked speculation the Fed will hike rates two more times this year as it has flagged but doubts returned to the market after the FOMC minutes showed most policymakers believe the Fed should start reducing its US$4.5 trillion balance sheet this year, a move that would amount to tightening monetary policy.
"Raising the fed funds rate a quarter of a point every now and then is tinkering at the edges compared to the elephant in the room that is the balance sheet," said ANZ Bank New Zealand senior economist Sharon Zollner, in a note.
