The NZ dollar got a lift from strong retail sales data today but it did not last for long as the US dollar surged to a four-month high after China reported strong fourth quarter growth.The NZ dollar rose about 30 points from 71.90USc to 72.30USc after Sta
The NZ dollar got a lift from strong retail sales data today but it did not last for long as the US dollar surged to a four-month high after China reported strong fourth quarter growth.
The NZ dollar rose about 30 points from 71.90USc to 72.30USc after Statistics New Zealand said both total sales and core retail sales, which exclude vehicle-related industries, rose a seasonally adjusted 0.8% in November.
The rises beat expectations, with the median forecasts in a Reuters poll of economists being a 0.5% rise in overall retail sales and a 0.2% rise in core retail.
But economists warned that the rises reflected some unusually big bounces in just a few categories and may not be sustainable.
The NZ dollar retreated and was 72.09USc at 5pm from 71.93USc at 8am and 72.95USc at 5pm yesterday.
Murray Hindley, chief currency dealer at ANZ, said yesterday's weaker than expected inflation data and risk aversion were still affecting the NZ dollar.
It had support at 71.70USc after breaking down lower yesterday. Resistance was currently around 72.35USc.
China's economy expanded 10.9% between October and December, which was lower than expected but the data reinforced fears that China will continue to take measures to cool its overheating economy.
News on Wednesday that some Chinese banks have been instructed to curb lending weighed on commodity currencies like the NZ dollar.
BNZ Capital strategist Mike Jones said the NZ dollar had been hit by a perfect storm of negative news in the 24 hours to 8am today.
It had been the weakest performing currency among the majors, falling almost 3% – the largest daily drop since November.
The NZ dollar was at ¥65.83 at 5pm from ¥66.56 yesterday and at 79.01Ac from 79.47Ac.
The trade weighted index was 65.83 at 5pm from 66.34 yesterday.
