The New Zealand dollar advanced in quiet trading as investors await direction from looming central bank meetings and new data on dairy prices and employment.
The kiwi gained to 85.23 US cents at 8am in Wellington, from 85.10 cents at 5pm yesterday. The trade-weighted index edged up to 79.80 from 79.74 yesterday.
The New Zealand dollar is consolidating this week after falling about 3 percent since the start of July, weighed down by weaker commodity prices, the outlook for reduced payments to dairy farmers, and a pause in future interest rate hikes and speculation the Reserve Bank may intervene in the market after governor Graeme Wheeler called the currency's strength "unjustified". Tomorrow, the focus will be on Fonterra Cooperative Group's GlobalDairyTrade auction for a gauge on how New Zealand's biggest exporter is faring after dairy prices fell to their lowest level since December 2012 in the last fortnightly auction. New Zealand employment figures tomorrow will also be watched.
"Most currencies have traded tight ranges over the past 24 hours," Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note. "Markets were fairly directionless in the absence of key data releases overnight."
The New Zealand dollar has support at 84.60 US cents and faces resistance at 85.40 cents, she said.
