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The New Zealand dollar drifted lower, while remaining within its recent range, as the stalled budget talks in the US kept traders from taking big positions, while a business confidence survey tomorrow is expected to affirm the strength of the local economy.
The kiwi traded at 82.82 US cents at 5pm in Wellington, from 83.12 US cents at the start of the day and down from 83.22 cents at the New York close on Friday. The trade-weighted index fell to 76.85 from 76.77 on Friday.
The kiwi was marginally weaker after the government affirmed its target to return to budget surplus by 2015, while posting a smaller-than-forecast operating deficit in the 12 months ended June 30. The currency didn’t move much after Finance Minister Bill English said it was still too high.
Financial markets are awaiting the resolution of a political stalemate in the US after Congress failed to agree on the budget last week, amid concern failure to find a solution bode poorly for a deal on lifting America’s debt ceiling by Oct. 17.
The New Zealand dollar “is locked in a bit of stasis here,” said Sam Tuck, senior manager FX at ANZ New Zealand. “The kiwi seems quite happy to trade around 83 (US cents) at the moment.”
Tuck says the currency may trade in a range of 82.60 cents to 83.60 cents in the next 12-to-24 hours. The Quarterly Survey of Business Opinion tomorrow may add to the latest ANZ Business Outlook in highlighting the strength of the New Zealand economy, though that is pretty much priced in, he said.
“The carry available from investing in a strong, stable New Zealand economy looks a good bet,” he said.
The New Zealand dollar slipped to 87.97 Australian cents from 88.03 cents at the start of the day and from 87.86 cents at 5pm on Friday. Australian markets are closed today for a Labour Day holiday.
The local currency fell to 80.45 yen from 80.65 yen on Friday. The kiwi rose to 61.07 euro cents from 60.85 cents Friday and gained to 51.67 British pence from 51.26 pence.
(BusinessDesk)