NZ dollar unchanged
The New Zealand dollar was little changed, remaining in a narrow range of about US0.6c that it first entered a week ago, with markets seemingly unwilling to move the currency until the US Federal Reserve’s rate hike intentions are known.
The kiwi dollar traded at US69.21c as at 0800 in Wellington from US69.20c late Tuesday. The trade-weighed index was at 75.90 from 75.83.
Currency markets were relatively subdued overnight despite weaker equities and crude oil, figures showing a rise in US producer prices (PPI) in February, and a decline in Chinese retail sales for February.
Along with the results of the Fed’s two-day meeting on Thursday (NZT), traders will also be awaiting the results of Dutch elections, any developments on Brexit and New Zealand gross domestic product, expected to show growth slowed in the fourth quarter.
“Stronger than expected US PPI data didn’t generate significant market movement, but reinforces inflation is on the rise,” Bank of New Zealand senior economist Doug Steel said in a note.
“Positive growth signals and rising inflation simply underscores the case for the Fed to hike rates tomorrow.”
Traders don’t expect much market reaction to fourth-quarter current account data this morning, expected to show the deficit accounted for 2.7 per cent of GDP, down from 2.9 per cent three months earlier.
US February consumer price index and retail sales figures are due out tonight, while Australian employment data and policy statements from both the Bank of Japan and the Bank of England will also be closely watched this week.
“[Thursday] could prove more turbulent,” Steel said.
The kiwi dollar rose to 65.20 euro cents from 64.96 cents late on Wednesday.
It was at A91.51c from A91.54c and 4.7859 yuan from 4.7852 yuan.
It traded at 79.40 yen from 79.42 yen and rose to 56.94 British pence from 56.72 pence.