KEY POINTS:
The New Zealand dollar was pinned within a tight range today, having made up a little ground against the US dollar after local markets closed last week.
By 5.15pm, the kiwi had inched up to US69.05c from US68.85c late on Friday. Against the Australian dollar, it was at A88.38c from A88.06c, and the trade weighted index was at 68.26 from 67.94 on Friday.
A heavy data week - including gross domestic product and current account - will provide much food for thought for investors, but currency markets have already priced in a fairly optimistic outlook for the NZ dollar, Bank of New Zealand currency strategist Danica Hampton said.
As a result, unless Thursday's GDP is much stronger than the 0.7 per cent rise forecast by economists in a Reuters poll, the currency is expected to stick to recent ranges.
GDP growth was 0.5 per cent in the second quarter. Economists expect average GDP growth for the year to the September quarter of 1.8 per cent, down from 1.9 per cent.
Aside from GDP, current account data is released on Wednesday, and the National Bank's monthly business outlook and the Government's Half-Yearly Economic and Fiscal Update are on Tuesday.
The kiwi has held up well against a firmer greenback, ANZ economists said, buoyed by stronger than expected data last week such as retail sales.
"The currency market is building up a head of steam in anticipation of the Reserve Bank having to deliver an interest rate hike in January," the bank said.
Carry trades, which benefit high-yielding currencies such as the NZ dollar, were also still in favour.
The US dollar was steady as investors sat tight for a Bank of Japan policy meeting and comments from BOJ Governor Toshihiko Fukui to see whether he will signal a rate rise as soon as January.
Analysts said short-covering in the US dollar could take a back seat in the next few sessions and the yen could inch up slightly as dealers focus on Fukui's comments, which will follow a two-day BOJ rate meeting that begins later in the session.
The following are Reuters currency rates:
15pm today 5pm Friday
NZ dlr/US dlr US69.05c US68.85
NZ dlr/Aust dlr A88.38c A88.06c
NZ dlr/euro 0.5275 0.5236
NZ dlr/yen 81.54 81.15
NZ dlr/stg 35.34p 35.11p
NZ TWI 68.26 67.94
Australian dollar US78.14c US78.19c
Euro/US dollar 1.3090 1.3148
US dollar/yen 118.08 117.88
- NZPA