The New Zealand dollar held above 57 US cents as investors shift their attention back to central banks with the Federal Reserve and European Central Bank among those reviewing their benchmark interest rates this week.

The kiwi dollar traded at 57.12 US cents at 7am in Auckland from 57.05 cents on Friday, with the greenback stumbling after US President Donald Trump expressed a reluctance to impose tariffs on China if he doesn’t need to.

On Sunday in the US, Trump threatened to impose steep sanctions on Columbia over the coming week after the Latin American nation turned away two US military aircraft carrying migrants deported as part of the White House’s crackdown on immigration.

Markets waxed and waned last week on the various statements issuing forth from the new Trump administration, including his preference for interest rates to come down.

The Federal Open Market Committee is expected to keep the US benchmark rate unchanged in a range of 4.25%-to-4.5%, while the ECB is predicted to cut its key rate.

“In the week ahead, the Fed is widely expected to hold policy steady after rate cuts over the past three meetings,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Probably more interesting than (Fed chair Jerome) Powell’s comments at the press conference will be President Trump’s reaction.”

To infinity and beyond

Stock markets cooled on Friday on Wall Street after the S&P 500 index hit a record, with chipmakers and artificial intelligence-related companies attracting interest after Trump’s Stargate initiative to invest heavily in AI infrastructure in the coming years.

The December quarter earnings season continues with earnings from five of the Magnificent 7 keenly in focus. Earnings so far have been broadly stronger, indicating the US economy is in good health.

Software company Oracle – one of the backers of the Stargate programme – emerged as one of the parties Trump’s talking to about keeping Chinese social media platform TikTok operating in the US.

Meanwhile, The Wall Street Journal reported that US banks are preparing to sell US$3 billion of loans to Elon Musk’s X, formerly Twitter,

Local markets are expected to be quiet on Monday, with Auckland anniversary closing New Zealand’s corporate centre and Australian markets closed for the Australia Day public holiday.

Reporting by Paul McBeth. Image from Blogging Guide on Unsplash.