The New Zealand dollar spiked to heady heights above US82c -- the level it was at against the greenback before Monday's big aftershocks in Christchurch -- after domestic retail sales data came in above expectations.
The New Zealand dollar spiked to heady heights above US82c -- the level it was at against the greenback before Monday's big aftershocks in Christchurch -- after domestic retail sales data came in above expectations.
But as traders and analysts discounted any chance the figures would sway the Reserve Bank into a rate hike for the rest of the year, that key exchange rate came off the boil and the kiwi slid for the rest of the day.
At 5pm, it was trading at US81.51c, down on its level of US81.85 at the same time yesterday.
A BNZ analyst described the sales figures as a further sign of the resilience in Christchurch's economy and people, and improved momentum across the wider economy. Overall volumes expanded a seasonally adjusted 0.9 percent in the March quarter, despite the destructive earthquake that struck Christchurch half way through the quarter.
"Without the disaster the nation might well have posted the strongest quarterly retail sales gain in four years," the BNZ said.
But traders turned their backs on the sales data and kept their focus on the implications of continuing aftershocks of the Christchurch earthquake. After the most severe 6.3 magnitude aftershock on Monday, US insurance risk analysis firm EQECAT estimated insured incremental losses of $US3-$US5 billion ($NZ3.67 billion- $US6.1 billion) due to additional damage. Finance Minister Bill English later questioned the basis of the coast estimate.
The US dollar was lower against most major currencies, as an improvement in global risk appetite saw investors chase higher yielding currencies. The Australian dollar was $US1.0699 at 5pm, compared with $US1.0639 at the same time yesterday, while the euro was $US1.4408c compared with $US1.4433 yesterday.
The NZ dollar fell to A76.19c at 5pm, from A76.95c at the same time yesterday, and dropped slightly against the euro, to 0.5660 from 0.5670 euro over the same period, and it fell to 65.64 yen from 65.69.
The trade weighted index was 70.15 points at 5pm from 70.43 yesterday.
