The New Zealand dollar fell as the greenback reached a three-week high ahead of Federal Reserve chair Janet Yellen's Senate testimony and optimism about the Trump administration's recent foreign policy efforts and tax cut plans.
The kiwi declined to 71.77 US cents as at 8am in Wellington from 72 cents late yesterday. The trade-weighted index fell to 78.26 from 78.51.
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Yellen is scheduled to appear before the Senate Banking Committee at about 4am NZ time tomorrow and there is market speculation she will reiterate the Fed's view that there could be three interest rate hikes this year, starting as soon as next month. Meanwhile, markets are awaiting an announcement from US President Donald Trump on potential tax cuts after he dropped hints last week. And reports of more constructive talks with China and Japan has soothed concerns about deteriorating US foreign policy.