Kiwi eases but stays in tight range

The New Zealand dollar stuck to a very tight range yesterday, largely overlooking ongoing weakness in business confidence, ahead of the dairy auction overnight and key economic data over the next few days.

The kiwi traded at US69.93c as at 5pm in Wellington versus US70.10c late Monday.

The kiwi remained steady despite business confidence holding around an eight-year-low in the December ANZ Business Outlook survey.

A net 38 per cent of businesses were pessimistic about the year ahead, versus 39 per cent in the prior survey,

The kiwi didn’t fall as the survey was “less bad”, but it wasn’t very positive either, said Mark Johnson, a senior dealer at OMF.

Traders will be focused on the GlobalDairyTrade auction, he said.

The threat of drought may push prices for whole milk powder higher while abundant supplies of skim milk powder in Europe could depress prices for that product, according to AgriHQ.

Investors will also be watching for the balance of payments for the third quarter and trade and migration figures for November today, followed by third-quarter gross domestic product tomorrow.

Globally, the US tax reform will remain in focus as markets wait to see if it is signed into law by President Donald Trump. According to Reuters, the US Congress appeared all but certain to pass the legislation after two Senate Republican holdouts agreed to support the overhaul.

The kiwi dollar fell to 52.26 British pence from 52.56p on Monday and eased to 59.31 euro cents from

59.58c. It declined to 78.76 yen from ¥78.98 and slipped to A91.27c from A91.49c. — AAP