The kiwi traded in a tight range today as the market waits on the Reserve Bank's Monetary Policy Statement in two days time.
At 5pm today the kiwi was buying US70.91c from US70.23c at 5pm on Friday before the long weekend, having traded between US70.77c and US70.94c today.
BNZ currency strategist Sue Trinh said the market was reluctant to push the kiwi back above US71c ahead of the MPS on Thursday.
Ms Trinh said with most people expecting the bank will leave the official cash rate unchanged at 6.75 per cent, the focus will be on the tone of accompanying statement.
"At the moment there are some analysts in the market pricing in the beginnings of an easing cycle by the RBNZ as soon as early as next year. If the RBNZ backs away from their recently staunch stance then it could see those easing expectations become a little bit more entrenched which would be a very heavy weight on the kiwi," she said.
Meanwhile the euro was under pressure after comments by the European Central Bank president Jean-Claude Trichet were interpreted as meaning euro rates could be lowered.
A cut in rates would further underscore the US dollar's interest-rate advantage over the euro. US rates stand at 3.0 per cent, compared with 2.0 per cent in the euro zone.
The ECB has kept rates steady since June 2003, even as the 12-nation currency region has failed to show sustained recovery.
At 5pm today the euro was buying US$1.2268 (US$1.2285 at 5pm on Friday), the greenback was at 106.89 yen (107.83), and the aussie was at US76.58c (US75.63c).
On its crosses, the kiwi was buying A92.61c (A92.78c), 0.5781 euro (0.5716), 75.80 yen (75.63), 38.87 British pence (38.61), and 0.8851 Swiss francs (0.8781).
The trade-weighted index was at 70.68 (70.25), while the monetary conditions index was at plus 1070 (1041).
On the money markets, 90-day bank bill yields were at 7.03 per cent (7.04), July 2009s were at 5.75 per cent (5.77) and April 2015s were at 5.62 per cent (5.65).
- NZPA
<EM>Currency:</EM> Kiwi trades tight range
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