The New Zealand dollar was little changed from the New York close as investors prepare for a heavy news flow from the US, including the Federal Reserve's latest policy review, an economic growth reading, capped off with employment figures at the end of the week.
The kiwi traded at 85.63
US cents at 8am from 85.51 cents on Friday in New York and 85.73 cents at 5pm in Wellington. The trade-weighted index was 79.90 from 79.94 at the New York close.
The US dollar index, a measure of the greenback against a basket of currencies, climbed to a four month high as traders focus on US news this week, which includes the Federal Open Market Committee meeting, which is expected to continue the move away from extraordinary policy, the first reading of second-quarter US gross domestic product, manufacturing and non-farm payrolls for July. Investors are anticipating the data will continue to show signs of an improving economy, which will encourage the Fed to start lifting interest rates from zero, which would increase the attraction of the greenback.
"Data due this week will determine whether or not this strength is justified, with the calendar packed with top-tier US releases," Bank of New Zealand currency strategist Raiko Shareef said in a note.
The local currency sank 1.7 percent last week after the Reserve Bank of New Zealand talked up the chance of intervening in foreign exchange markets, calling its strength "unjustified", which was seen as an explicit reference to its intervention policy.
