The New Zealand dollar drifted higher in quiet trading as investors latched onto reports US President Donald Trump complained of the Federal Reserve's interest rate hikes.
The kiwi traded at 66.37 US cents as at 8am in Wellington from 66.22 cents yesterday. The trade-weighted index was at 71.83 from 71.79 yesterday.
Central bankers will converge at Jackson Hole, Wyoming this week at their annual conference, where Fed chair Jerome Powell is scheduled to speak. The Fed has been raising interest rates and winding back quantitative easing as it brings monetary policy back to a more normal setting as the US economy accelerates under the stimulus of President Trump, who told Reuters the US central bank should support growth, saying "I'm not thrilled with his raising of interest rates".
The Fed's trajectory is at odds with New Zealand and Australia, where both central banks expect to keep their benchmark rates unchanged for the foreseeable future.
"This follows Trump's interview with CNBC last month where he commented he was 'not thrilled' with rate increases, breaking with the tradition of Presidents avoiding direct comments on monetary policy that put into question the Fed's independence," Bank of New Zealand senior markets strategist Jason Wong said in a note. "The NZD was in a drift-down mode for much of Monday and reached an overnight low of 0.6611 and a turnaround in the USD's performance sees it closer to 0.6630 this morning."
