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Kiwi trades in tight range ahead of CPI

Reported by AAP
Friday, January 18, 2013
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The New Zealand dollar was confined in a narrow range ahead of the release of the December quarter consumer price index (CPI).

The kiwi was at 84.10 US cents at 8am, up from 83.93 US cents at 5pm on Thursday.

"It traded in a 40-point range at best overnight," Mike Jones, from the sales team at BNZ said.

There was potential for the CPI data on Friday morning to set the market alight, particularly if inflation was low, he said.

The market is expecting a 0.1 per cent rise in the CPI, taking the annual rate to 1.2 per cent.

The Reserve Bank is also expecting a 0.1 per cent rise in the quarter and inflation is expected to remain at the bottom of the bank's one to three per cent target band during the coming year, according to economists.

Imre Speizer, senior market strategist at Westpac, said a small negative number could have negative psychological connotations, which would undermine the local currency.

The kiwi rose on Wednesday after disappointing employment data undermined the Australian dollar, increasing the case for an interest rate cut in Australia.

In New Zealand, the central bank is expected to keep the official cash rate unchanged until the end of the year.

The kiwi was at 79.73 Australian cents at 8am, slightly down from the 79.86 cents at 5pm on Thursday.

The kiwi was also at 75.59 yen from 74.11 yen and at 62.86 euro cents from 63.19 euro cents.

The trade-weighted index was at 75.50 from 75.40.

BusinessDesk

01/11/2014 19:53Sydney, Australia. 1 November,2014
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