The New Zealand dollar edged up in a tight range as investors weigh the likelihood of Federal Reserve tapering and the outcome of looming US budget negotiations.
The kiwi advanced to 82.46 US cents at 8am in Wellington from 82.27 cents at the 5pm market close yesterday, having traded in a narrow range of 82.15 cents and 82.70 cents overnight. The trade-weighted index was little changed at 76.78 from 76.74 yesterday.
Investors are evaluating when the Fed will start to pull back on its US$85 billion a month monetary stimulus programme after it unexpectedly chose not to cut the programme last week. Attention is also turning to the possibility of a US debt default as Monday's deadline looms for congressional officials to secure a budget deal which would allow the government to keep running.
"The NZD/USD has traded a fairly tight range over the past 24 hours," Kymberly Martin, a strategist at Bank of New Zealand, said in a note. "With little on the domestic agenda through to week-end, expect the NZD to take its cue from broad global risk sentiment and the tone set by the USD."
In the US today, traders will be eyeing news on US budget negotiations, home sales data, the latest reading of second-quarter GDP, weekly initial jobless claims and the Kansas City Fed factory index.
