NZ dollar treads water through Northern Hemisphere holidays

The kiwi was trading at 65.51 US cents at 5pm.

The New Zealand dollar was little changed as 10-year wholesale money remained below 2 percent and, with much of the Northern Hemisphere on holiday on Monday night, New Zealand time, markets will probably continue treading water.

The kiwi was trading at 65.51 US cents at 5pm in Wellington from 65.53 at about 8am while the trade-weighted index eased to 72.13 points from 72.15.

The domestic currency "hasn't even broken a 10 point range throughout the day," says Mike Shirley, a dealer at Kiwibank.

The dust appears to have settled for the moment on the United States/China trade war after US President Donald Trump said after the local market closed last week that there remains "a good possibility" that negotiations with Beijing will get back on track.

Trump is set to meet China's President Xi Jinping at the G20 summit in Osaka next month, although his attendance is not yet assured.

Those comments slightly improved the prospects of a deal between the two nations, Shirley says.

The US markets will be closed tonight for the Memorial Day holiday while British markets, roiled by Prime Minister Theresa May's resignation, are also closed for the Spring Bank Holiday.

New Zealand 10-year swap rates hit record lows last week after Westpac Australia's chief economist Bill Evans predicted the Reserve Bank of Australia will cut its cash rate three times this year starting in June.

Evans is even talking about the RBA using "quantitative easing," a form of money printing that involves the central bank buying bonds.

Wholesale interest rates bounced a little off last week's lows but the 10-year swap rate remains below 2 percent.

The New Zealand two-year swap rate rose to 1.4830 percent from 1.4769 on Friday while the 10-year swap rate climbed to 1.9750 percent from 1.9625.

The New Zealand dollar was trading at 94.52 Australian cents from 94.42, at 51.47 British pence from 51.40, at 58.47 euro cents from 58.48, at 71.73 yen from 71.66 and at 4.5172 Chinese yuan from 4.5214.