By Rebecca Howard
June 24 (BusinessDesk) - The New Zealand dollar is steady against the greenback ahead of this week's domestic monetary policy review.
The kiwi was trading at 65.89 US cents at 8am am versus 65.87 late Friday in New York. The trade-weighed index was at 72.03 from 72.02.
The New Zealand dollar has benefited after the US Federal Reserve turned more dovish last week, stating it is prepared to do whatever is “appropriate to sustain the expansion” as the US economy starts to show signs of weakness and US-China trade tensions persist.
Data overnight Friday in the US didn't help sentiment toward the greenback.
A flash reading of the IHS Markit Composite PMI Output Index, a measure of overall business activity in the manufacturing and services sectors, fell to 50.6 in June, down from 50.9 in May. Dow Jones Newswires reported. The US Manufacturing Purchasing Managers' Index fell to a seasonally adjusted 50.1 in June, its slowest pace in roughly 10 years, down from 50.5 in the previous month.
"Kiwi remains buoyed by the weaker USD, with markets now focused on the upcoming RBNZ meeting," said ANZ FX/rates strategist Sandeep Parekh.
The central bank cut the rate cut 25 basis points to a record low 1.50 percent in May and left the door open for more rate cuts. The market is pricing a 22 percent chance of a rate cut at this week's meeting but sees an 81 percent of a cut at the July monetary policy review, said Mark Lister, head of wealth research at Craigs Investment Partners.
The decision is due Wednesday afternoon.
Lister said investors will also be watching for the ANZ business outlook survey for June as China PMI due over the weekend next weekend.
The New Zealand dollar was trading at 95.01 Australian cents from 94.91 cents, at 51.73 British pence from 51.62, at 57.92 euro cents from 57.89, at 70.53 yen from 70.61, and at 4.5257 Chinese yuan from 4.5168.