NZ dollar little changed as weaker-than-expected retail sales overshadowed by US data
Feb. 17 (BusinessDesk) - The New Zealand dollar was little changed after weaker than expected consumer spending figures failed to spook investors wary of the greenback after soft US manufacturing data last week.
The kiwi traded at 83.75 US cents at 5pm in Wellington from 83.77 cents at 8am and 83.64 cents on Friday in New York. The trade-weighted index edged up to 78.43 from 78.29 last week.
New Zealand retail sales rose 1.2 percent in the final three months of 2013, according to Statistics New Zealand, short of the 1.5 percent growth predicted in a Reuters survey of economists. Still, the kiwi didn’t fall out of favour after a manufacturing report in the US showed industrial production reported its biggest decline in more than four years as the harsh winter disrupted the world’s biggest economy.
“There’s been a number of bad-weather impacts in economic activity reflected in the data, and that’s hurting the US dollar as a consequence,” said Michael Johnson, senior trader at HiFX in Auckland. “I’m happy to be long the kiwi, which can grind higher, but it hasn’t got a million miles more in it.”
A public holiday in the US is expected to keep markets quiet during the Northern Hemisphere session.
New Zealand’s economic outlook also got a boost from the BNZ-BusinessNZ performance of services index, which showed the sector expanded at its fastest pace in six-and-a-half years in January, with new orders failing to keep up with demand.
The Reserve Bank of Australia will publish minutes to this month’s monetary policy review tomorrow, which will give traders some insight into the central bank board’s view. They kept the key rate unchanged at 2.5 percent, while removing the prospect of another rate cut. The kiwi was little changed at 92.43 Australian cents at 5pm in Wellington from 92.54 cents on Friday in New York.
The local currency traded unchanged at 85.12 yen from the New York close, and was little changed at 61.08 euro cents from 61.07 cents last week. It slipped to 49.85 British pence from 49.94 pence last week.