The New Zealand dollar <NZD=> edged up close to two-week highs on Wednesday, supported by a weaker U.S. currency and higher commodity prices, as investors eyed the global interest rate outlook for near-term direction.

The kiwi, which has lost 6 percent over the past month, has stabilised in the past few sessions and analysts said rangy trading was likely in the near-term amid a lack of significant local data.

“The markets are pausing for a bit of a breather,” said Danica Hampton, currency strategist at Bank of New Zealand.

“Ultimately, it’s heading lower but we’re probably going to see some consolidation in the near term.”

At 0450 GMT the New Zealand dollar was at $0.7150/60, just short of a peak of $0.7162 hit on Monday and against $0.7080/86 in the local session the previous day.

The kiwi was supported by gains in commodity prices, with gold <XAU=>, oil and metal prices all rebounding in Asian trade. Those gains tend to feed into higher world prices for New Zealand’s major commodity exports, such as dairy products.

Still, most analysts expect the New Zealand dollar to resume its downtrend given expectations for further domestic rate cuts.

All 17 analysts in a Reuters poll published on Wednesday expected the Reserve Bank of New Zealand to cut rates by a quarter point to 7.75 percent at its next review on Sept. 11.

They also predict the kiwi to fall to $0.6850 by the end of the year [nWEL304242].

For now, investors were looking ahead to the release of minutes from the Bank of England’s August monetary policy meeting, due later in the day, for clues on whether the BoE will lower interest rates in coming months. [ID:nLJ398170]

New Zealand bonds were mostly flat, with the yield on the benchmark 10-year government bond <NZ10YT=RR> unchanged at 6.18 percent.

Source: http://www.afxnews.com

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