The New Zealand dollar rose against the greenback overnight but remained flat on the other crosses ahead of consumer price inflation figures for the June quarter and US Federal Reserve Chairman Ben Bernanke's testimony in Washington.
The kiwi recently traded at US79.77 cents, up from US79.61c at 5pm yesterday, while on the Trade Weighted Index of major trading partners' currencies it was little changed at 72.28 from 72.32.
Currency markets were driven by a weakening in the US dollar, with traders cutting their positions in the currency on bets Bernanke will sketch out the path for a third round of quantitative easing when he testifies before the US House of Representatives later today.
"The kiwi ground a little higher against a broad weakening in US dollar although, if you squint through the volatility, the kiwi is still very range bound," said Mike Jones, a currency strategist at Bank of New Zealand.
A deeper decline in the greenback was pared by some safe haven buying after the International Monetary Fund trimmed its global growth forecast for 2012 to 3.5 per cent from 3.6 per cent in April. Meanwhile, 2013 growth was revised to 3.9 per cent from 4.1 per cent.
The Dollar Index, a broad measure of the greenback against a basket of major currencies, recently traded at 83.09, its lowest level in a week, down from 83.34 yesterday.
Currency traders will be watching today's CPI release with interest, with a weaker print likely to dent appetite for the kiwi as it adds to the argument for the Reserve Bank of New Zealand having no need to lift the official interest rate from 2.5 per cent.
Economists are betting prices at the shops rose 0.5 per cent in the second quarter according to a Reuters poll, leaving it on par with the March quarter. That will however take annual inflation for the year to June to 1.1 per cent, down from 1.6 per cent in the first quarter.
On the crosses, the kiwi's movements against non-US dollar denominated currencies were muted.
The New Zealand dollar recently traded at 77.79 Australian cents, little changed from A77.84, and was similarly stable against the Japanese yen, having last traded at 62.88 yen from 62.91 yesterday.
The kiwi was last at 64.96 euro cents from 64.98 euro cents, and it slipped marginally to 50.99 pence from 51.08 pence.
Jones said the currency is likely to trade between a range of US79.40c and US80c, with the bias tipped to the upside.
http://www.stuff.co.nz/business/market-data/7290624/Kiwi-gains-ahead-of-CPI-Bernanke
