The New Zealand dollar held near a two-week low in the lead-up to a slew of central bank meetings this week, including the Reserve Bank of New Zealand, where traders will be looking for any shift in direction.
The kiwi dollar was virtually unchanged at 82.91 US cents at 8am from 82.92 cents at the close of New York trading on Friday. The trade-weighted index fell to 73.51 from 73.76.
Reserve Bank Governor Alan Bollard is expected to hold the official cash rate at 2.5 per cent when he reviews monetary policy on Thursday, though analysts are starting to see emerging signs of higher interest rates on the horizon. Traders are starting to bet on a rate hike in the next year, pricing in 24 basis points of increases in the coming 12 months, according to the Overnight Index Swap Curve.
"The kiwi has been trading in a tight channel since the end of January," said Stuart Ive, currency trader at HiFX. Investors will be looking for the "tone of the statement that comes afterwards," to gauge the possibility of rate rises in the near future, he said.
The Reserve Bank of Australia kicks off this week's interest rate reviews tomorrow, and most strategists expect Governor Glenn Stevens will hold the target cash rate at 4.25 per cent. Other central banks meeting this week include the Bank of Canada, Bank of England and European Central Bank.