NZ dollar falls on weak core retail data
The economy shows weakness as the focus turns to an interest rate decision by the Reserve Bank next week.
The New Zealand dollar fell to a three-week low today as underlying trends in retail sales data suggested the economy was weak.
Meanwhile, the focus is turning to an interest rate decision by the Reserve Bank next week.
By 5pm the NZ dollar was at 75.64USc, up from the 75.21USc it sank to in afternoon trading. It ended the domestic day little changed from where it started and down from 76.34USc at 5pm yesterday.
New Zealand retail sales data for November today was mixed, with the headline figure above expectation and the number excluding the automotive segment below expectation.
"The 1.5% lift in November retail sales look decent enough at face value. This was slightly above market and our expectations, but overall the detail reveals a still weak underbelly," BNZ economists said.
ANZ said New Zealand data continues to be weak, contributing to the unwinding of the end of year rally in NZ dollar.
The euro and US dollar were continuing their battle for supremacy, with euro winning this week.
Chinese economic data was generally better than expected, prompting speculation that policymakers could tighten further in order to stem inflation pressures.
This weighed on commodity prices, dragging commodity currencies lower.
"We think NZ dollar under-performance will continue next week as the RBNZ decision looms," ANZ said.
The RBNZ sets the official cash rate on Thursday. The market is expected to be quiet on Monday with trading reduced by the Wellington Anniversary holiday.
The NZ dollar was 76.54Ac at 5pm from 76.72Ac yesterday, having dropped to a one-week low around 76.33Ac during the session.
The NZ dollar also fell to a one-month low around €0.5600 from €0.5678 at 5pm yesterday. It was at ¥62.73 from ¥62.72 yesterday, while the trade weighted index fell to 67.85 from 68.37.
NZPA
Fri, 21 Jan 2011
Fri, 21 Jan 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
NZ dollar falls on weak core retail data
11736