The New Zealand dollar was little changed in local trading as investors compose themselves after a 5.4 per cent slide against the greenback on improving prospects for the US economy.

The kiwi traded at 80.81 US cents at 5pm in Wellington from 81 cents at 8am and 80.76 cents on Monday. The trade-weighted index was 76.38 from 76.23.

Markets in New York and London were closed for public holidays on Monday, giving little guidance to investors in the Southern Hemisphere after sharp gains in the greenback in recent months.

Traders have been more upbeat about the world’s reserve currency amid growing expectations the Federal Reserve will start unwinding its massive stimulus programme as early as this year.

“There’s a bit of consolidation going on after what’s been a pretty big run up in the US dollar over the past few weeks,” said Dan Bell, currency strategist at HiFX in Auckland.

“I wouldn’t be surprised to see the kiwi dollar push up.”

Any gains in the local currency will be short-lived as the market grows increasingly focused on US economic data, he said.

The kiwi was almost unchanged at 83.86 Australian cents at 5pm in Wellington from 83.85 cents on Monday, rose to 82.42 yen from 81.61 yen and was little changed at 62.56 euro cents from 62.50 cents.