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Kiwi steady at start of budget week

NZ Newswire logoNZ Newswire 21/05/2017 Jonathan Underhill

The New Zealand dollar is little changed at the start of a quiet week for domestic economic data and the Federal Reserve's policy meeting is likely to be the main event ahead of an expected US rate hike next month.

The kiwi dollar traded at US69.25 cents as at 8am on Monday in Wellington, little changed from late New York trading on Friday. The trade-weighted index slipped to 76.99 from 77.05.

St Louis Federal Reserve president James Bullard, regarded as a dove of the US central bank, on Friday said that the Fed's projected path for interest rates was "overly aggressive relative to actual incoming data on US macroeconomic performance".

But his comments weren't enough to shake the market's conviction that the Fed will hike next month, with the odds sitting at about 76 per cent.

The main event for the New Zealand market is likely to be Finance Minister Steven Joyce's election year budget on Thursday.

"There is very little in the way of domestic economic data releases ahead of Thursday's annual budget release, while internationally Thursday morning's FOMC meeting minutes will be scrutinised by investors for clues on the timing of the next rate move," traders at HiFX said in a note.

On Monday morning, the New Zealand dollar was little changed at 92.75 Australian cents from A92.78c on Friday in the US. It rose to 61.79 euro cents from 61.54c and traded at 53.23 British pence from 52.12p. It traded at 76.99 yen from 77.05 yen and was little changed at 4.7665 yuan.

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