NZ dollar rises touches month-high after disappointing US manufacturing report
By Tina Morrison
Feb 17 (BusinessDesk) – The New Zealand dollar touched a month-high after a weaker economic report in the US dented demand for the greenback.
The kiwi touched a high of 83.85 US cents on Friday night, and was trading at 83.77 cents at 8am in Wellington from 83.64 cents at the New York close and 83.39 cents in Wellington Friday. The trade-weighted index advanced to 78.50 from 78.31 on Friday.
The US dollar weakened after a report on Friday showed US manufacturing output unexpectedly dropped during January, recording its biggest decline in more than four years as winter weather disrupted production, raising concern about the impact of harsh weather on the US economy. In New Zealand today, reports on retail sales and services sector activity are expected to show continued strength in the local economy.
“The NZD/USD rose in the face of broad USD weakness through the evening” on Friday, Kymberly Martin, markets strategist at the Bank of New Zealand, said in a note. “Today, the local focus is New Zealand’s Q4 retail sales numbers.”
BNZ expects retail sales to have expanded 1.6 percent in the fourth quarter, compared with a gain of just 0.3 percent in the previous quarter. The report is scheduled for release at 10:45am.
The BusinessNZ-BNZ PSI release, due out at 10:30am, will probably also show the sector remained firmly in expansion in January, BNZ’s Martin said.
“Combined, these results should help support the NZD/USD,” she said.
It may be a quieter trading today as the US celebrates Washington’s Birthday public holiday.
The New Zealand dollar slipped to 92.55 Australian cents from 92.69 cents on Friday, advanced to 61.14 euro cents from 60.95 cents, was little changed at 50.02 British pence from 50.07 pence and gained to 85.24 yen from 84.86 yen.