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NZ dollar static as holidays limit trading

NZ NewswireNZ Newswire 30/05/2016 Paul McBeth

The New Zealand dollar was little changed as investors questioned whether the Federal Reserve will hike interest rates next month, with holidays in the US and UK keeping a lid on trading volumes.

The kiwi traded at 66.91 US cents at 8am in Wellington from 66.84 cents on Monday. The trade-weighted index was unchanged at 72.35.

US markets were closed for the Memorial Day holiday and the UK was closed for a Spring bank holiday, leaving trading relatively quiet.

Traders continued to focus on the Fed's meeting next month after chair Janet Yellen told an audience on Friday that the next decision was "live".

"The USD is firmer than prior to Yellen's comments, European and Asian equity values have continued to advance and the government bond market has not yet spat the dummy, although this will be tested when the US rates market reopens tonight. None of this provides warning signs yet for the Fed," ANZ Bank said.

"ANZ business confidence today will be a key read for kiwi, but the kiwi will still mostly be driven by US data flow which begins to pick up tonight."

Government figures on April building consents and the ANZ Business Outlook survey are scheduled for release.

The local currency fell to 93.04 Australian cents from 93.34 cents and slipped to 60.04 euro cents from 60.20 cents after German inflation and European Union confidence came in just ahead of expectations.

The New Zealand dollar gained to 74.33 yen from 73.84 yen, increased to 4.4027 Chinese yuan from 4.3991 yuan and was little changed at 45.70 British pence from 45.73 pence.

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