The kiwi is heading for a 1.2 per cent weekly gain against the greenback. Photo / NZME.
The kiwi is heading for a 1.2 per cent weekly gain against the greenback. Photo / NZME.
The NZ dollar was little changed as holidays in China, South Korea and Taiwan kept markets quiet and traders awaited US growth figures.
The kiwi traded at US72.45 cents at 5 pm yesterday from US72.47c at 8am and US72.84c late on Thursday.The trade-weighted index was at 79.36 from 79.42.
"Asiahas been very quiet. The kiwi hovered around the US72.50 [cent] level for most of the day," said OMF private client manager Stuart Ive. Investors were treading water ahead of the first reading on fourth-quarter US gross domestic product, expected to be 2.1 per cent.
"Ahead of the FOMC next week, if that comes out as a solid number, we might see some further US dollar strength."
However, although a stronger US dollar "might give the kiwi a bit of a nudge to the downside," he expects it to stick within recent ranges ahead of the Reserve Bank's rate decision on February 9.
The market will be watching for any comments on inflation, in particular, after data on Thursday showed inflation has moved back within the Reserve Bank's target band and has accelerated more than the bank was projecting.
"Given the path that inflation appears to be on, if that continues into the middle of this year, then a rate hike would have to be on the cards" sooner than expected, Ive said.
The kiwi is heading for a 1.2 per cent weekly gain against the greenback.
Against the Australian dollar, the kiwi was trading at A96.1c from A96.14c on Thursday.
While a spike higher on stronger-than-expected domestic inflation had triggered some profit-taking on Thursday afternoon, Ive said it clearly remains on a "solid footing" against the aussie. The fact that it has weakened doesn't mean it's going to go lower from here, he said.
The local currency fell to 4.9822 yuan from 5.0099 yuan and gained to 67.86c from 67.68c. It rose to 57.61p from 57.59p and increased to 83.30 from 82.53.
NZ's two-year swap rate rose one basis point to 2.42 per cent.
