The New Zealand dollar will probably hold around 75 US cents until next Thursday as traders wait for the Reserve Bank to say whether it will cut the OCR.

The economy will now barely grow at all in 2011, because of a "noxious mix" of spiking global petrol and food prices along with the impact of the second Christchurch earthquake, says NZIER.

An ASB Bank economist says she expects Reserve Bank governor Alan Bollard to cut the official cash rate by 50 basis points to 2.5 per cent in part due to the economic impact of the Christchurch earthquake.

Foreign investors boosted their share of government debt on issue last month to just shy of $28b, as the Crown borrows $300m a week to maintain its spending programme.

The New Zealand dollar rose to a week-high against the pound after Britain's economy unexpectedly shrank in the fourth quarter of last year.

Equities in Europe and on Wall Street rallied after Portugal's successful bond sale eased concerns about the euro-zone's debt crisis.

The economy rebounded in the December 2010 quarter, after contracting in September, according to the latest Quarterly Survey of Business Opinion.

The New Zealand dollar faces pressure in its first full week of trading in 2011 as support for the greenback is bolstered by upbeat US data and renewed fears about European debt.

If the good news is that the Reserve Bank expects rates to be lower for longer, the bad news is why it thinks that.