KEY POINTS:
The New Zealand dollar traversed a very narrow range today, as investors still sought the high interest rates offered by the kiwi but with little data of note on the horizon.
By 5.50pm, the kiwi was at US66.55c, similar to Friday's close of US66.49c. It lost ground against the Aussie, trading at A86.57c from A86.74c on Friday.
A combination of weak US data and upbeat local data, such as quarterly retail sales, provided some support for the kiwi last week, the Bank of New Zealand said.
"Stronger than expected economic data reinforced to market participants that there is still a very real chance that the RBNZ may need to hike rates further," BNZ currency strategist Danica Hampton said.
The BNZ expected the Reserve Bank to hold rates steady until at least January, following the release of top-tier data such as gross domestic product and the consumers price index.
"Nevertheless, in the meantime, renewed tightening expectations have boosted NZ short-term interest rates and helped support the NZD," she said.
The domestic calendar is light this week, with October merchandise trade data on Friday the highlight.
Ms Hampton expected the kiwi to remain between US65.80c and US67c during the week.
The US dollar edged higher against the yen, brushing off a weekend meeting of the Group of 20 countries that discussed currency values but offered few surprises.
The world's major economies face growing inflation risks but prospects for economic growth are strong, G20 financial leaders said on Sunday after a two-day meeting that also featured fresh calls for more foreign exchange flexibility.
The group did not mention China by name when referring to currency policy, but officials signalled the G20 clearly had the economic superpower in mind.
Reuters currency rates:
5.50pm today 5pm Friday
NZ dlr/US dlr US66.55c US66.49c
NZ dlr/Aust dlr A86.57c A86.74c
NZ dlr/euro 0.5182 0.5201
NZ dlr/yen 78.48 78.68
NZ dlr/stg 35.12p 35.22
NZ TWI 66.45 66.57
Australian dollar US76.87c US76.66c
Euro/US dollar 1.2842 1.2784
US dollar/yen 117.92 118.32
- NZPA