NZ dollar little changed as Yellen testimony, US inflation data awaited
By Jonathan Underhill
July 11 (BusinessDesk) - The New Zealand dollar was little changed, having traded in a 0.50 US cent range for the past week, as traders await testimony from Federal Reserve chair Janet Yellen and US inflation data to provide fresh impetus to the greenback.
The kiwi traded at 72.72 US cents as at 8am in Wellington from 72.76 cents late yesterday. The trade-weighted index was little changed at 78.21.
Yellen is scheduled to give testimony to the US Congress on Wednesday and may reiterate that the US central bank sees economic conditions conducive to a third interest rate hike in 2017. The greenback has strengthened against the yen in the past month as divergent central bank policies come into focus, with the Bank of Japan affirming it will continue to provide stimulus to the Japanese economy. Likewise, the Reserve Bank of New Zealand has signalled it doesn't intend to hike rates anytime soon.
"In the absence of any notable economic data releases, and with investors happy to remain on the sidelines ahead of Janet Yellen's semi-annual testimony before Congress later this week the currency markets have continued to trade tight ranges," traders at HiFX said in a note.
Traders will be watching today for June spending on electronic cards for a reading on the pace of consumer spending.
The kiwi traded at 82.98 yen from 83.04 yen. BOJ Governor Haruhiko Kuroda on Monday reiterated in a speech at a quarterly meeting of the central bank's regional branch managers that the central bank is resolved to maintain its massive stimulus programme until inflation is stable above its 2 percent target, Reuters reported. That stands in sharp contrast to the outlook in the US where stronger-than-expected jobs growth has stoked expectations that the Fed will stick with its tightening plans this year.
The kiwi traded at 95.60 Australian cents from 95.61 cents yesterday and was little changed at 4.9489 yuan from 4.9482 yuan. It traded little changed at 56.44 pence and barely budged at 63.81 euro cents.