NZ dollar edges back toward 4-month high at start of OCR week

The New Zealand dollar struggled to gain traction against the US dollar.

The New Zealand dollar struggled to gain traction against the US dollar after weaker US housing and consumer confidence figures, as traders locally look ahead to the Reserve Bank's rates review on Thursday.

The kiwi rose to 72.52 US cents as at 8am in Wellington from 72.48 cents in late new York trading on Friday. It reached as high as 73.19 cents last week, the highest since Feb. 8. The trade-weighted index was at 77.95 from 77.92.

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US housing starts and building permits were both weaker than expected in May, while the University of Michigan consumer sentiment index came in at 94.5 in June against expectations of 97, which saw the US dollar retreat into the end of the week. In New Zealand, the Reserve Bank is expected to keep the official cash rate at 1.75 per cent on Thursday, having surprised many economists last month by projecting just one increase in the OCR by June 2020.

This week, "the RBNZ's latest OCR review will be one of the few releases of interest, but even that is expected to pass with little market reaction," said Jason Wong, currency strategist at Bank of New Zealand, in a note. "The bank will likely keep its policy guidance unchanged, and should make only a few tweaks to its one-page press statement."

Ahead of the OCR review, traders will be watching today for the Westpac consumer confidence survey for the second quarter and the performance of services index for May.

The kiwi traded at 95.11 Australian cents from 95.06 cents on Friday in New York. It rose to 56.78 British pence from 56.44 pence and traded at 64.70 euro cents from 64.73 cents. The kiwi rose to 4.9384 yuan from 4.9357 yuan and traded at 80.40 yen from 80.34 yen.