KEY POINTS:
The New Zealand dollar trod a predictably narrow range today as Wellington Anniversary Day reduced domestic activity.
By 5pm, the kiwi was at US69.54c from US69.48c in late afternoon trade on Friday. The currency was virtually unchanged against the Australian dollar, at A88.07c from A88.06c on Friday.
"It's been a very quiet day," a dealer said, noting the range of US69.43c to US69.56c for the session.
"The kiwi looks trapped in a range at the moment."
The focus this week is on the Reserve Bank's review of interest rates, with the announcement of its decision at 9am on Thursday.
"The market seems to believe that the rates will remain on hold, but (with) still a reasonably hawkish statement," the dealer said.
Economists are divided about whether the central bank will raise rates to dampen inflationary pressure, with most recent inflation data showing an easing in consumer price inflation but data showing a still-strong economy.
Aside from the Reserve Bank, the week should be quiet with Australia on holiday on Friday.
The New Zealand dollar remained firm against the yen, but was unable to match the US dollar's four-year high against the Japanese currency.
The yen has suffered since its central bank left interest rates steady at just 0.25 per cent last week. That is well below New Zealand's benchmark rate of 7.25 per cent.
Japan's very low interest rates have prompted investors to sell the yen and use the funds to buy higher-yielding currencies in carry trade while mobilising Japanese investors to seek better returns in foreign assets.
Reuters currency rates:
5pm today 5pm Friday
NZ dlr/US dlr US69.54c US69.48c
NZ dlr/Aust dlr A88.07c A88.06c
NZ dlr/euro 0.5359 0.5353
NZ dlr/yen 84.42 84.33
NZ dlr/stg 35.21p 35.18p
NZ TWI 69.03 68.98
Australian dollar US78.98c US78.86c
Euro/US dollar 1.2976 1.2978
US dollar/yen 121.32 121.37
- NZPA