The kiwi softened against the greenback today and is expected to trade in a narrow band this week, on the back of light local data flow.
At 5pm today the kiwi was buying US70.22c from US70.76c at Friday's local close, having traded in a range of US70.23 to US70.47c.
On the local data front this week, the market will be eyeing building consents figures which will be released on Wednesday. Reserve Bank governor Alan Bollard last week blamed rampant spending in the household sector for much of the imbalances in the economy.
Dr Bollard made the comments when he raised the country's key interest rate by 25 basis points last week to 7 percent.
Interest rate expectations have bolstered the greenback. Data out Friday that showed the US economy grew a better-than-expected 3.8 percent in the third quarter, supporting expectations that the Federal Reserve will keep raising rates.
With the Federal Open Market Committee widely expected to raise its key rate to 4 percent on Tuesday from the current 3.75 percent, the market's focus was on what the post-meeting statement has to say about inflation risks.
If the wording suggests the central bank was more worried about inflation, investors are expected to buy the US dollar on views the Fed would continue to raise rates.
In contrast to the US firmness, an expectation that Australia's key interest rate will remain unchanged in upcoming months saw the Australian dollar weaken against most currencies, including the kiwi.
Australian inflation data for the September quarter released last week surprised markets when it showed inflation remained within the Reserve Bank of Australia's 2-to-3 percent target, suggesting the 5.5 percent cash rate will remain on hold for months to come.
The following are Reuters currency rates:
NZ dlr US70.22c US70.76c
NZ dlr/Aust dlr A93.74c A93.50c
NZ dlr/euro 0.5826 0.5831
NZ dlr/yen 81.26 81.59
NZ dlr/stg 39.56p 39.69p
NZ TWI 71.72 71.95
Australian dollar US74.92c US75.68c
Euro/US dollar US1.2055 US1.2137
US dollar/yen 115.74 115.32
- NZPA
<EM>Currency:</EM> Kiwi trades in narrow band
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