NZ dollar tests lower end of range in thin Monday trade
Jan. 21 (BusinessDesk) - The New Zealand dollar fell to test of the bottom end of a recent range in trading reduced by a public holiday in Wellington.
The kiwi was at 83.60 US cents at 5pm, down from 83.69 US cents at 8am and changed from 83.54 cents at 5pm on Friday. It sank as low as 83.32 cents in early afternoon trading.
Dealers said the Australian dollar was weaker and investors were cautious while the Bank of Japan considered monetary policy, with a statement due on Tuesday NZ time, and Australian inflation figures due on Wednesday.
"I think there is just a little bit of profit-taking. There is not a lot of trading and kiwi is just testing the lower end of its recent range," Alex Sinton, senior dealer at ANZ, said.
The kiwi may trade in a range of 81.80 cents to 84.70 cents this week, according to a BusinessDesk survey of four traders and strategists.
It was at 74.95 yen at 5pm from 75.34 at 8am and 75.18 on Friday.
"What we expect to see from the Bank of Japan is them adding further stimulus to their economy. In the last week the yen has weakened considerably," Stuart Ive at HiFX said.
All 23 economists in a Bloomberg News survey expect the central bank to expand asset purchases at a two-day meeting that starts today.
"Most of what they unveil tomorrow will have been priced into the yen and if anything we might get some yen buying once the news is out with people taking profit on short-yen positions," Imre Speizer, senior markets strategist at Westpac, said.
"Kiwi-yen is really extremely over-bought technically and it's really screaming that it needs to correct at least a few yen," he said.
The kiwi was at 79.50 Australian cents at 5pm from 79.42 cents at 5pm on Friday, with predictions last week from National Australia Bank that the Reserve Bank of Australia will loosen monetary policy up to three times this year.
It was 62.77 euro from
62.41 euro and 52.69 British pence from 52.27.
The trade-weighted index was at 75.19 from 75.25.