NZ dollar little changed as Fed sees weak US growth

The kiwi was little changed at 84.15 US cents at 8am in Wellington from 84.13 cents at 5pm yesterday.

The New Zealand dollar was little changed in Northern Hemisphere trading after Federal Reserve official William Dudley said US growth is still a forecast rather than reality, weighing on investors' expectations for when the Fed will start unwinding its stimulus programme.

The kiwi traded at 83.57 US cents at 8am in Wellington from 83.50 cents at 5pm yesterday. The trade-weighted index was 77.97 from 77.91 yesterday.

Dow Jones hits new record overnight:

Dudley's speech and weak home building figures added to uncertainty over the Fed's planned tapering, and the yield on US 10-year Treasuries fell 3.2 basis points to 2.675 per cent.

"The carry-over sentiment from last week and the building numbers play to no tapering this year. That saw US interest rates lower and the US dollar lower," said Imre Speizer, market strategist at Westpac Bank. "Tapering might drag on for ages, but by December the local stuff should be more obvious whether we're going to see rate hikes and I expect the kiwi higher."

Speizer said the local currency may trade between 83.30 US cents and 84 cents today.

The kiwi rose to 89 Australian cents at 8am in Wellington from 88.82 cents ahead of the release of minutes to the last RBA policy meeting, when it kept the key rate unchanged at 2.5 per cent and said Australia's currency is over-valued.

Westpac's Speizer said the kiwi may gain against its trans-Tasman counterpart if the minutes keep another rate cut on the table, and talk more to Australia's currency being too high.

The local currency was little changed at 83.66 yen at 8am in Wellington from 83.60 yen yesterday, and was almost unchanged at 61.85 euro cents from 61.86 cents. It edged up to 51.86 British pence from 51.76 pence yesterday.