The New Zealand dollar returned to where it began yesterday morning, treading water around the 44.80USc mark.
The kiwi traded at 44.84c about 5 pm, from 44.78c at 9 am.
The market lacked local and offshore business as traders awaited the Reserve Bank's statement on its official cash rate today, followed by an announcement on rates by the US Federal Reserve next week.
One dealer said the euro's recovery had aided the New Zealand and Australian dollars, but the kiwi had been trapped in a very tight 12-point range during the day. "Really there has been a dearth of business and it's been a very frustrating day," he said.
The Reserve Bank's cash rate is currently at 6.50 per cent, and market expectation is that RB Governor Don Brash will leave it unchanged.
The kiwi is unlikely to react to anything other than a major move by the Reserve Bank today. "As far as the spot [price]'s concerned, it will remain bid because Dr Brash ... is either going to leave rates untouched, or there's a possibility he might squeeze them [up] a quarter of a percentage point," he said. "If they do, the initial reaction will be for the kiwi to go higher because people at the moment are prepared to play off the interest rate differential game."
A no-change verdict on the cash rate will aid the kiwi in its steady rise against the US dollar.
- NZPA
<i>Currency:</i> Kiwi waits on Reserve Bank
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