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NZ dollar static in subdued trading

NZ Newswire logoNZ Newswire 27/01/2017 Rebecca Howard

© Rex Images The New Zealand dollar was little changed as holidays in China, South Korea and Taiwan kept markets quiet and traders awaited US growth figures.

The kiwi traded at 72.45 US cents at 5pm in Wellington from 72.47 cents at 8 am and 72.84 late on Thursday.The trade-weighted index was at 79.36 from 79.42.

"Asia has been very quiet. The kiwi has been hovering around the 72.50 level for most of the day," said OMF's Stuart Ive.

Investors were largely treading water ahead of the first reading on fourth-quarter US gross domestic product, expected to be 2.1 per cent, later in the global trading day.

"If that comes out as a solid number, we might see some further US dollar strength."

However, while a stronger US dollar "might give the Kiwi a bit of a nudge to the downside" he expects it to stick to recent ranges ahead of Reserve Bank of New Zealand's monetary police statement on February 9, he said.

The market will be watching for any comments on inflation, in particular, after data Thursday showed inflation has moved back within the Reserve Bank's target band and has accelerated more than the bank was projecting.

"Given the path that inflation appears to be on, if that continues into mid of this year, then it (a rate hike) would have to be on the cards," Ive said.

The kiwi is heading for a 1.2 per cent weekly gain against the greenback.

Against the Australian dollar, the kiwi was trading at 96.19 Australian cents in Wellington from 96.14 on Thursday.

The local currency fell to 4.9822 Chinese yuan from 5.0099 yuan, gained to 67.86 euro cents from 67.68 cents, was trading at 57.61 British pence from 57.59 pence and continued to pick up against the yen, rising to 83.30 yen from 82.53 yen 24 hours ago.

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