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NZD edges back toward four-month high

NZN 18/06/2017 Jonathan Underhill

The New Zealand dollar struggled to gain traction against its United States counterpart after weaker US housing and consumer confidence figures, as traders locally look ahead to the Reserve Bank's rates review this week.

The kiwi rose to US72.52 USc as at 8am in Wellington from US72.48c cents in late new York trading on Friday.

It reached as high as US73.19c last week, the highest since February 8.

The trade-weighted index was at 77.95 from 77.92.

US housing starts and building permits were both weaker than expected in May, while the University of Michigan consumer sentiment index came in at 94.5 in June against expectations of 97, which saw the US dollar retreat into the end of the week.

In New Zealand, the Reserve Bank is expected to keep the official cash rate at 1.75 per cent on Thursday, having surprised many economists last month by projecting just one increase in the OCR by June 2020.

"The RBNZ's latest OCR review will be one of the few releases of interest [this week], but even that is expected to pass with little market reaction," Bank of New Zealand currency strategist Jason Wong said.

"The bank will likely keep its policy guidance unchanged, and should make only a few tweaks to its one-page press statement."

Ahead of the cash rate review, traders will be watching on Monday for the Westpac consumer confidence survey for the second quarter and the performance of services index for May.

The kiwi traded at A95.11c from A95.06c on Friday in New York

It rose to 56.78 British pence from 56.44 pence and traded at 64.70 euro cents from 64.73 cents.

The kiwi rose to 4.9384 yuan from 4.9357 yuan and traded at 80.40 yen from 80.34 yen.

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