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NZ dollar little changed ahead of meetings

NZ NewswireNZ Newswire 26/07/2016 Paul McBeth

The New Zealand dollar was little changed as investors await central bank meetings in the US and Japan this week, and ahead of Australian inflation data.

The kiwi traded at 70.49 US cents at 8am in Wellington, the same level from 5pm on Tuesday. The trade-weighted index was little changed at 75.55 from 75.51.

The Federal Reserve and Bank of Japan will review policy this week, with investors expecting to see more optimism from the Fed and a bigger stimulus package in Japan.

Australia's consumer price index is out on Wednesday and is seen as the final piece of data that may prompt the Reserve Bank of Australia to cut the target cash rate to 1.5 per cent when it meets next week.

"The RBA moved to an explicit easing bias in July tied to inflationary, labour and housing market dynamics. Today's second quarter CPI remains critical to whether or not it will ease further next week," ANZ's Con Williams said.

"Expect support for the NZD to be maintained, particularly if the Australian Q2 CPI release fails to meet expectations."

The kiwi dollar has retraced some of its recent losses over the past week and investors will be watching the draft unitary plan for Auckland to see whether the local authority will make it easier to increase housing supply.

The local currency was little changed at 73.73 yen from 73.62 yen, dipped to 4.6996 Chinese yuan from 4.7083 yuan, traded at 53.62 British pence from 53.76 pence and was little changed at 64.13 euro cents from 64.07 cents.

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