Kiwi steady as investors wait

The New Zealand dollar trod water with financial markets awaiting a raft of events, including several central bank announcements, US data and local employment data.

The kiwi traded at US67.93 cents from US67.87c on Friday. The tradeweighted index was at 73.17 from 73 last week.

Investors are awaiting upcoming central bank meetings in the US, UK and Japan, with the Bank of Japan’s meeting tomorrow of particular interest, given speculation that lower bank profitability and muted inflation could see it rejig its yield curve control settings. Investors expect the Bank of England will raise interest rates on Thursday, while the US Federal Reserve isn’t expected to hike at this week’s meeting, and US jobs data will be a focus after secondquarter gross domestic product data was weaker than expected. Locally, today’s business confidence data from ANZ Bank will be closely watched for signs of further weakness ahead of domestic jobs data tomorrow. Economists are tipping a steady second-quarter unemployment rate but some expect signs of wage inflation on a higher minimum wage and slowing migration.

The kiwi could test resistance at around US68.60c and if it breaks through that it could head toward US70c.

The kiwi traded at 91.90 Australian cents from 91.96 cents and at 75.44 yen from 75.46 yen. It was at 4.6434 Chinese yuan from 4.6279 yuan and traded at 51.85 British pence from 51.90 pence last week, and at 51.85 euro cents from 51.90 cents.

New Zealand’s two-year swap rate was unchanged at 2.13 per cent and 10-year swaps were unchanged at 3.02 per cent.