The New Zealand dollar edged up amid US dollar weakness as traders await key US economic releases in coming days.
The kiwi advanced to 85.46 US cents at 8am in Wellington from 85.31 cents at 5pm yesterday, trading in a tight range of 85.27 cents and 85.60 cents overnight. The trade-weighted index edged up to 79.74 from 79.66 yesterday.
The US dollar index, which measures the greenback against a basket of currencies, weakened after a measure of house sales in June unexpectedly fell ahead of this week's release of US second-quarter gross domestic product, a Federal Reserve policy announcement from chair Janet Yellen and the publication of US nonfarm payrolls data. The New Zealand dollar has dropped 1.8 per cent since Reserve Bank governor Graeme Wheeler last week called the currency's strength "unjustified".
"Everything is in a waiting pattern still, we have heard from Wheeler, now we want to hear from Yellen and also what the jobs data does," said Peter Cavanaugh, client advisor at Bancorp Treasury Services. "The US GDP, unless it is a shocker, probably won't do much."
Today, traders will be keeping an eye out for a potential announcement from Fonterra following its board meeting today. The nation's largest company is expected to announce a cut to its forecast dairy payout for 2015 following a drop in global dairy prices and an elevated exchange rate, with speculation the payout could be revised down to around $6 per kilogram of milk solids from a previous forecast of $7/kgMS and from a record $8.40 /kgMS in 2014.
