The New Zealand dollar held above 69 US cents as the Organisation of the Petroleum Exporting Countries' move to boost production lifted prices for raw materials, supporting demand for commodity-linked currencies.
The kiwi edged up to 69.13 US cents as at 8am in Wellington from 69.06 cents on Friday in New York and 69.01 cents in Asia last week. The trade-weighted index was at 73.38 from 73.29 last week.
The Thomson Reuters CRB commodity price index, a measure of 19 commonly traded raw materials, rose 1.6 percent, spurred on by higher oil prices after Opec said it plans to increase production by 1 million barrels a day. Some producers won't be able to meet the target, meaning the increase is effectively 600,000 barrels a day. While that supported currencies sensitive to commodity prices, the growing trade tensions between the US and the rest of the world remain in focus, with US President Donald Trump threatening to impose tariffs on European Union nations in response to their retaliatory barriers imposed over steel and aluminium tariffs and the Financial Times reporting Trump plans to restrict Chinese investment in US companies and start-ups.
"So as the new week begins, the focus will remain on the US-China trade war saga and apart from that the economic calendar is fairly light for the day ahead," Bank of New Zealand senior market strategist Jason Wong said in a note. The kiwi recovered from its low on Thursday, and "as usual, local factors weren’t in play, with the USD softer across the board, meeting some resistance to push on ahead after its recent strong run."
No local data is scheduled for today. The Reserve Bank's policy review on Thursday is in focus, with governor Adrian Orr expected to keep the official cash rate at 1.75 percent.
ANZ Bank New Zealand chief economist Sharon Zollner and economist Philip Borkin said in a note the market may be anticipating "a slightly more dovish outcome".
The kiwi rose to 4.4953 Chinese yuan from 4.4888 yuan last week after the People's Bank of China said it will cut the reserve ratio requirement for large commercial lenders and the reserve requirement for smaller banks to free up US$100 billion of capital as momentum in the world's second-biggest economy slows. Large lenders will have to use the funds on debt-to-equity swaps while small banks will be allowed to lend the funds.
The local currency traded at 75.88 yen from 75.93 yen last week and rose to 92.88 Australian cents from 92.72 cents. It edged up to 52.15 British pence from 52.02 pence last week and increased to 59.32 euro cents from 59.21 cents.