The New Zealand dollar was little changed after weaker than expected US retail sales eroded optimism the Federal Reserve will slow its asset purchase programme, and ahead of local inflation figures forecast to show consumer prices are rising at a slow pace.
The kiwi traded at 78.08 US cents at 8am in Wellington from 78.14 cents at 5pm yesterday. The trade-weighted index edged up to 74.32 from 74.26 yesterday.
Traders were upbeat early in Northern Hemisphere trading after a strong New York manufacturing figure, though that optimism was popped by retail sales figures showing growth of just 0.4 per cent in June, half the expected pace in a Bloomberg survey. The Dollar Index, a measure of the greenback against a basket of currencies, was little changed at 83.05.
New Zealand's second quarter consumer prices index is expected to show an annual pace of 0.8 per cent, according to a Reuters survey, indicating there's little pressure on the Reserve Bank to hike interest rates in response to a bubbling property market.
"Even if we get a big surprise in the inflation data, it would still be dominated by US surprises," said Imre Speizer, market strategist at Westpac Banking in Auckland. If inflation is slower than expected, "it would push down the short-end (in interest rate markets) and push down the kiwi/US for a knee-jerk reaction."
