NZ dollar little changed as US growth eyed, Yellen awaited
By Jonathan Underhill
June 27 (BusinessDesk) - The New Zealand dollar was little changed, having gained overnight following weak US data, as investors continue to weigh the pace of growth in the world's biggest economy and await a speech from Federal Reserve chair Janet Yellen.
The kiwi was trading at 72.87 US cents as at 8am in Wellington from 72.83 cents late yesterday. The trade-weighted index edged up to 78.56 from 78.49.
The New Zealand dollar briefly gained overnight, reaching as high as 73.10 cents after figures showed US durable goods orders dropped 1.1 percent in May, almost twice the decline expected. Traders say the kiwi is close to key resistance levels, which are likely to gap further gains.
"While we believe New Zealand’s economic credentials remain solid, we are mindful of chasing further strength at these levels," said Philip Borkin, senior economist at ANZ Bank New Zealand. "All eyes will be on Yellen," he added.
Yellen will deliver her speech in London on Tuesday, where the topic is global economic issues and where investors will be listening for any hint of a third US rate hike this year. On Thursday, the final estimate for US first-quarter gross domestic product is expected to confirm the world's biggest economy grew 1.2 percent and on Friday, the core PCE for May, Yellen's preferred inflation measure, may print at zero.
Ahead of Yellen's speech, New Zealand merchandise trade for May is today expected to show a trade surplus of $419 million, just a tad down from the previous month's $578 million.
The kiwi traded at 96.03 Australian cents from 96.08 cents. The kiwi advanced to 57.23 British pence from 57.14 pence and rose against a broadly weaker Japanese currency to 81.53 yen from 81.04 yen. It fell to 4.9782 yuan from 4.9806 yuan and traded at 65.09 euro cents from 65.07 cents.