Dollar edges higher as investors await US retail sales for direction

The New Zealand dollar edged higher in local trading as investors await US retail sales to gauge the strength of the world's biggest economy.

The kiwi rose to 86.31 US cents at 5pm in Wellington from 86.17 cents at 8am and 86.21 cents yesterday. The trade-weighted index increased to 80.21 from 80.10 yesterday.

Consumer spending in the US probably grew 0.4 percent last month, according to a Bloomberg survey of economists, in a sign the world's biggest economy is on track to recovery. Retail sales kick off a data-heavy week in the US, including inflation, manufacturing and housing figures, as well as a speech by Federal Reserve chair Janet Yellen. Traders are watching for the greenback to start appreciating as the US recovery prompts the Fed to exit its quantitative easing and zero-interest rate policies.

"There's a fairly decent flow of US data with CPI (consumer price index) and retail sales - strength should be good for the greenback," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "Currencies look like they don't know what to do with the US dollar. Do they continue with the rebound that happened very late last week, or go back to trashing the US dollar?"

Markets will keep tabs on the New Zealand Reserve Bank's financial stability report tomorrow for an update on the housing market, and whether that might have a bearing on the interest rate track. Traders have pared back their expected pace of future rate hikes as inflation remains contained in an accelerating economy.

The kiwi advanced to 92.25 Australian cents from 92.09 cents yesterday ahead of Australia's Federal government budget, which is expected to show deep spending cuts in the face of ballooning deficits.

The local currency increased to 62.71 euro cents from 62.63 cents ahead of Germany's ZEW survey of economic sentiment. It was little changed at 51.11 British pence from 51.15 pence yesterday, and gained to 88.27 yen from 87.91 yen.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7282 -0.0001 -0.01%
AUD 0.9496 0.0030 0.32%
EUR 0.6481 -0.0008 -0.12%
GBP 0.5610 0.0025 0.45%
HKD 5.6459 0.0007 0.01%
JPY 73.9540 0.4370 0.59%

Commods

Commodity Price Change Time
Gold Index 1319.6 -1.410 2016-09-29T00:
Oil Brent 49.8 0.570 2016-09-29T00:
Oil Nymex 47.8 0.780 2016-09-29T00:
Silver Index 19.2 0.070 2016-09-29T00:

Indices

Symbol Open High Last %
NZX 50 7343.4 7361.1 7343.4 0.24%
NASDAQ 5311.3 5317.0 5318.5 -0.93%
DAX 10240.7 10315.6 10405.5 -1.10%
DJI 18322.9 18366.2 18339.2 -1.07%
FTSE 6919.4 6919.4 6919.4 -0.84%
HKSE 23435.3 23484.4 23739.5 -1.86%
NI225 16474.5 16497.5 16693.7 -1.46%
ASX 5471.3 5471.3 5471.3 -0.65%