The New Zealand dollar was little changed as traders await tomorrow's interest rate decisions from the Federal Reserve and the Reserve Bank of New Zealand.
The kiwi was at 67.77 US cents at 8am in Wellington, from 67.75 cents at 5pm yesterday. The trade-weighted index was at 73.13 from 72.96yesterday.
While few expect either the Federal Open Market Committee or the RBNZ to change interest rates when their decisions are announced tomorrow morning, investors will be looking for clues as to the timing of future policy, with the Fed looking to hike rates while the RBNZ is expected to ease further. The Fed decision is scheduled for release at 7am tomorrow while the RBNZ is due at 9am.
"Markets continued to wash around, awaiting the FOMC," ANZ Bank New Zealand senior economist Mark Smith and senior FX strategist Sam Tuck said in a note. "We expect NZD to continue to trade in a tight range until tomorrow morning's FOMC and RBNZ meetings shatter the peace."
ANZ expects the kiwi to trade between 67.40 US cents and 68.60 cents today. The local focus today will be on Australian third-quarter inflation data scheduled for release at 1:30pm New Zealand time. Headline inflation is expected to rise 0.7 percent in the quarter, with a 0.5 percent rise in the core inflation measure.
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Any currency reaction to the data will likely be seen in the kiwi/Aussie cross as traders are reluctant to move the greenback ahead of the Fed, ANZ said.
The New Zealand dollar advanced to 94.20 Australian cents from 93.63 cents yesterday, gained to 61.37 euro cents from 61.21 cents, increased to 44.29 British pence from 44.11 pence, slipped to 81.53 yen from 81.68 yen and edged higher to 4.3045 yuan from 4.3030 yuan.
