NZ dollar headed for 0.4% weekly fall but rangebound ahead of US GDP data

The kiwi traded at 67.81 US cents at 5pm.

The New Zealand dollar is headed for a 0.4 per cent weekly fall and is stuck in a tight range as investors anticipate a solid read-out from US gross domestic product data later in the global trading day.

The kiwi traded at 67.81 US cents at 5pm in Wellington from 67.84 US cents at 8:30am in Wellington and 68.36 US cents late yesterday. It was at 68.07 cents last Friday in New York. The trade-weighted index was at 72.94 from 73.26 yesterday.

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The kiwi opened weaker after the European Central Bank kept rates unchanged, as expected, and said it expects the key ECB interest rates to remain at their present levels at least through the summer of 2019. It spent most of the local trading day treading water ahead of the US data.

The US second-quarter gross domestic product data is expected to show solid growth, with investors poised for a big number. Economists expect around 4.2 per cent growth, according to MarketWatch, which would be the fastest since the third quarter of 2014 when it hit 5.2 per cent.

US President Donald Trump has said it could be as high as 4.8 per cent and White House National Economic Council Director Larry Kudlow told Fox Business Thursday in the US that "you're going to get a very good economic growth number tomorrow. Big."

"The overnight losses could build if the GDP number is as solid as the market is expecting ... but the risk, now that everyone is pumped for a big number, is that it is isn't and everyone will have to scramble," said Martin Rudings, senior dealer foreign exchange at OMF.

The kiwi traded at 58.20 euro cents from 58.28 cents late yesterday and at 51.71 British pence from 51.78 pence. It was at 75.29 yen from 75.75 yen yesterday and at 4.6095 Chinese yuan from 4.6276 yuan.

New Zealand's two-year swap rate lifted 1 basis point to 2.13 per cent and 10-year swaps fell 2 basis points to 3.02 per cent.