Views are split on the direction of the New Zealand dollar heading in to the Reserve Bank's review of interest rates on Thursday amid global market uncertainty.
The kiwi may trade between 63.50 US cents and 66.80 cents this week, according to nine currency advisers surveyed by BusinessDesk. Four expect a gain, four predict a decline and one is betting it will be little changed. It recently traded at 64.67 US cents.
All eyes are on central banks this week, with meetings scheduled for the Federal Reserve, the Bank of Japan and the Reserve Bank of New Zealand. Investors are betting on additional stimulus this year in response to global market volatility following a slump in oil prices, weak inflation, falling commodity prices and forecasts for lower economic growth.
"Following the market shenanigans in the brief period since this year has started, markets are not surprisingly nervous," said Peter Cavanaugh, client adviser at Bancorp Treasury Services. "Fresh in the local market's mind is the fact that the Reserve Bank cut the cash rate in December and whilst no one is expecting them to do so this week, the worry is what sort of language that is going to come out.
"Staunchness, provided it's credible, will give the New Zealand dollar some support but any hints that the Reserve Bank are wavering towards another OCR cut could see the New Zealand dollar weaken very quickly," said Cavanaugh. "In this heightened uncertainty, central banks' role has become more pronounced."
