NZ dollar steady ahead of Fed, data; bonds flat

* Kiwi holds around 64 U.S. cents, investors on Fed watch

* Kiwi unmoved by consumer confidence rebound

* Key Q1 current account, GDP data due up later in week

WELLINGTON, June 24 - The New Zealand dollar <NZD=> held onto offshore gains on Wednesday, but was stuck in a narrow range ahead of the U.S. Federal Reserve's interest rate decision later on and some key local data.

The kiwi had recovered much of the previous day's drop in Tuesday's offshore session, regaining the 64 U.S. cent level, in a broad sentiment shift against the U.S. currency as investors mulled the prospects for the Fed meeting.

The Fed is not expected to change its current 0-0.25 percent rate band, but the statement will be poured over for signs it plans to start removing monetary stimulus or whether it will seek to dampen expectations of rate rises.

"If the Fed talks an exit strategy that will be positive for the U.S. dollar and negative for the kiwi, and likely the opposite if that doesn't occur," said Westpac senior strategist Imre Speizer.

The New Zealand dollar was at the top of the session's range at $0.6405/12 at 0500 GMT compared with $$0.6274/84 late in the local session on Tuesday. It traded a tight $0.6374-0.6411 range during the domestic session.

A report showing NZ consumer sentiment rebounded to an 18-month high in the second quarter had little market impact, but offered hope that the economy might finally be on the road to recovery after a long-standing recession [nWEL360121].

"This outcome is good news for the retail and housing sectors as a confident consumer is more likely to spend and invest out of the recession," said TD Securities senior strategist Annette Beacher, adding that the data also underpinned expectations that the central bank will look to end its easing cycle.

The Reserve Bank of NZ earlier this month kept rates on hold after an aggressive string of cuts, but reiterated an earlier pledge to keep them at the current record low 2.5 percent or lower through to late 2010.

First-quarter NZ current account data is due on Thursday with expectations that the yawning deficit will narrow to around 8.4 percent of GDP from 8.9 percent. The recession is seen denting profits for foreign investors and import demand, while exports are expected to have benefited from a lower currency.

"That should be reasonably priced-in already and if it's close to consensus expect little reaction," Speizer said.

New Zealand swap rates were steady with two-year swaps <NZDSM3NB2Y=> at 3.80 percent and five-year swaps <NZDSM3NB5Y=> at 5.26 percent.

New Zealand government debt was also flat, with the yield on the benchmark NZ 10-year bond <NZ10YT=RR> unchanged at 6.00 percent.