Dollar gains after retail sales beats expectations

The New Zealand dollar gained after government figures showed better-than-expected consumer spending in the second quarter, stoking optimism about the strength of the local economy.

The kiwi rose as high as 84.88 US cents, trading at 84.70 cents at 5pm in Wellington from 84.56 cents at 8am and 84.26 cents yesterday. The trade-weighted index advanced to 79.51 from 79.06.

New Zealand's volume of retail sales rose a seasonally adjusted 1.2 percent in the three months ended June 30, beating expectations for 1 percent growth, and from an upwardly revised first-quarter. The increased consumer spending comes as households become more optimistic about the expanding economy in an improving labour market, and as the Reserve Bank takes a breather in hiking interest rates.

"Retail sales came in a bit stronger than expected in both headline and core numbers, and there were upward revisions in the prior quarter," said Michael Johnston, a senior dealer at HiFX in Auckland. "That gave the kiwi a bit of a short in the arm with a spike up, but it couldn't get on with the job - the market is not comfortable taking the kiwi aggressively higher."

With little local data over the next over the coming month, HiFX's Johnston said the local currency will continue to grind lower as the US economic recovery gathers pace, reducing the need for the Federal Reserve to run a near zero-interest rate policy.

Separately, a survey showed New Zealand's manufacturing activity expanded for a 22nd month, albeit at a slower pace in July.

The local currency rose to 91.05 Australian cents at 5pm in Wellington from 90.77 cents yesterday, and gained to 86.87 yen from 86.18 yen. It increased to 63.36 euro cents from 63.05 cents, and advanced to 50.77 British pence from 50.13 pence yesterday.


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


Sym Price Change
USD 0.6555 -0.0006 -0.09%
AUD 0.9060 0.0020 0.22%
EUR 0.6180 0.0015 0.24%
GBP 0.4348 -0.0002 -0.05%
HKD 5.0807 -0.0038 -0.07%
JPY 80.5490 0.1660 0.21%


Commodity Price Change Time
Gold Index 1075.4 6.560 2015-11-24T00:
Oil Brent 44.5 0.400 2015-11-24T00:
Oil Nymex 42.9 1.140 2015-11-24T00:
Silver Index 14.2 0.130 2015-11-24T00:


Symbol Open High Last %
NZX 50 6105.5 6105.5 6101.3 -0.53%
NASDAQ 5106.9 5120.9 5102.8 0.22%
DAX 10958.4 11186.7 10934.0 2.05%
DJI 17820.8 17854.9 17812.2 0.15%
FTSE 6277.2 6348.1 6277.2 0.96%
HKSE 22533.5 22617.2 22587.6 -0.40%
NI225 19856.8 19871.8 19924.9 -0.39%