The kiwi was little changed at 84.15 US cents at 8am in Wellington from 84.13 cents at 5pm yesterday.
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 advanced after weaker than expected US housing sales data raised concerns the Federal Reserve may not start tapering its monetary stimulus next month.
The kiwi rose to 78.11 US cents at 8am in Wellington from 77.99 cents at the New York close and 78.30 cents onFriday. The trade-weighted index slipped to 73.62 from 73.99 on Friday.
The US dollar index, which measures the greenback against a basket of currencies, fell sharply after a report showed new home sales in the US dropped more than expected in July and the data for the previous three months was revised downwards. That raised concerns about the strength of the US economy and the likelihood that the Fed will start to pull back on its US$85 billion a month bond-buying programme as early as next month.
"The slump in sales, despite an apparent shortage of established dwellings on the market, could be a further sign that higher mortgage rates are nipping the nascent housing recovery in the bud," Imre Speizer, Westpac Banking Corp senior currency strategist, said in a note. The report was "enough to jolt the market into reassessing the chances of Fed tapering starting in September."
The US report showed new home sales plunged 13.4 percent in July, well below the expected 2 percent fall and at the lowest level since October 2012.
Tonight, traders will be eyeing a report on US durable goods orders for indications of a revival in the world's largest economy.
In New Zealand, a report at 10:45am on the trade balance for July is forecast to show a small deficit but overall healthy export figures, according to ANZ New Zealand.
The kiwi is likely to trade between 77.60 US cents and 78.60 cents with reasonable demand under 78 cents, ANZ senior economist Sharon Zollner said in a note.
The New Zealand dollar fell to 86.30 Australian cents at 8am in Wellington, from 86.77 cents on Friday. The local currency declined to 76.90 yen from 77.54 yen on Friday and slipped to 58.34 euro cents from 58.66 cents.
The kiwi weakened to 50.15 British pence from 50.23 pence as the UK markets are closed for the August Bank holiday today.
