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NZ dollar little changed after mixed Fed signals, lack of local data

09 Apr 15

eighted index rose to 79.07 from 78.94.

The Federal Open Market Committee's minutes of its March 17-18 meeting showed several members favoured raising US interest rates in June, while others preferred to wait until later in the year, arguing that weak crude oil and a stronger greenback would help curb inflation. The meeting predated last week's weaker-than-expected non-farm payrolls data and included the comment that gains in jobs had been strong.

"The major focus is what the Fed's going to do, and that's true in New Zealand because of own central bank is on the sidelines," said Imre Speizer, a strategist at Westpac Banking Corp. "It's going to be a Fed-driven story."

"There's expectations that data in the US will pick up in the second quarter - if that's the case then pricing for a Fed rate hike will get stronger," he said.

Traders are also looking ahead to the next GlobalDairyTrade auction next week on speculation prices could fall for a third straight sale in response to increased volumes of milk powder being offered.

The New Zealand dollar fell to 98.18 Australian cents from 98.24 cents. Speizer said the kiwi is unlikely to have another attempt at parity in the next few days, given the Reserve Bank of Australia didn't cut its cash rate as expected, and there is potential "for some minor weakness in Kiwi-Aussie." Still, with expectations the RBA will cut the rate next month, that will be the next opportunity for a tilt at parity, he said.

The kiwi rose to 90.74 yen from 90.38 yen and was little changed at 50.75 British pence from 50.83 pence. It gained to 70.10 euro cents from 69.53 cents.

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