The  New Zealand dollar inched higher against the US dollar as investors were reluctant to place fresh bets before the outcome of the US elections as well as central bank decisions in Australia, New Zealand and the US this week. 

The kiwi traded at 66.66 US cents at 8.30am in Wellington versus 66.61 US cents at the previous day’s close. The trade-weighted index was at 72.82 from 72.58.

“With the week jam-packed full of event risk, it is hardly surprising that the New Zealand dollar held in a relatively tight range overnight,” ANZ Research economist Miles Workman and senior macro strategist Philip Borkin said in a note. 

The Reserve Bank of Australia will offer its rate decision and statement later today.

“The RBA is expected to maintain a neutral policy tone at this afternoon’s policy update,” Jason Wong, Bank of New Zealand’s senior markets strategist, said in a note. “Focus will be on the RBA’s interpretation of a surprise sharp fall in the unemployment rate to 5 percent—whether or not it materially affects the bank’s outlook for inflation and policy.” 

All eyes are on the US mid-term elections; results will start coming through from Wednesday afternoon New Zealand time.

“Our base case (which we assign a 55-percent probability) is a Republican Senate and Democrat House,” according to ANZ’s Workman and Borkin. “If Democrats gain a majority, the Trump administration will likely focus more on foreign policy, with less domestic stimulus on the cards. Markets are likely to react accordingly to this softer growth outlook.”

The Federal Open Market Committee will also offer its statement at the end of a two-day meeting set to conclude in Washington on Wednesday.

Later Thursday, the Reserve Bank of New Zealand will offer its monetary policy decision and statement.

“Kiwi has consolidated above support levels, so the Reserve Bank of New Zealand would need to be quite dovish to see us give these levels a thorough test again in the near-term,” ANZ’s Workman and Borkin noted.

The kiwi traded at 92.47 Australian cents from 92.38 Australian cents.

The New Zealand dollar traded at 51.12 British pence from 51.26 British pence Monday. It was at 4.6168 Chinese yuan from 4.5885 yuan and traded at 75.44 yen from 75.38 yen. It was at 58.38 euro cents from 58.39 cents Monday. 

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