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Kiwi set for volatile week

NZ NewswireNZ Newswire 13/06/2016 Tina Morrison
The kiwi may trade between 68.80 US cents and 72 cents this week, according to seven currency analysts surveyed by BusinessDesk. © Bloomberg The kiwi may trade between 68.80 US cents and 72 cents this week, according to seven currency analysts surveyed by BusinessDesk.

The New Zealand dollar may be in for a volatile ride this week as traders face a slew of local data, the Federal Reserve decision on US interest rates, and continued uncertainty around Britain's referendum next week on European Union membership.

The kiwi may trade between 68.80 US cents and 72 cents this week, according to seven currency analysts surveyed by BusinessDesk. Three expect a decline, one expects a gain and three say it will likely remain broadly unchanged. It recently traded at 70.45 US cents.

Currency markets have been volatile ahead of the UK's June 23 vote on EU membership, with polling on the so-called 'Brexit' suggesting the decision is still too close to call.

The Organisation for Economic Co-operation and Development has said Britain's departure from the EU poses as big a threat to the global economy as a "hard landing" in China, with significant costs not just for the UK and Europe, but for the rest of the world.

"The UK referendum will be forefront of mind for investors and until that is out of our of the way, market conditions will be fairly choppy and illiquid," BNZ currency strategist Jason Wong said in a note.

Data scheduled for release in New Zealand this week includes food prices on Tuesday; current account and real estate sales data on Wednesday, gross domestic product on Thursday, and manufacturing and consumer confidence on Friday.

The fortnightly GlobalDairyTrade auction is held overnight on Wednesday.

The Fed's decision on interest rates will be published Thursday morning New Zealand time and the US also has retail sales and inflation data.

The Bank of Japan and the Bank of England are also announcing decisions on Thursday, on top of UK unemployment and inflation data this week.

Australia releases labour market data and Europe will report inflation figures.

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