By Rebecca Howard
June 17 (BusinessDesk) - The New Zealand dollar was trading lower after stronger than expected US retail data ahead of the Federal Reserve's meeting this week.
The kiwi was trading at 64.91 US cents from 65.34 US cents at 5pm in Wellington Friday. The trade-weighted index was at 71.61 from 71.89.
US retail sales lifted in May and April was also revised higher, suggesting a pick-up in consumer spending and easing fears about an economic slowdown.
Headline retail sales rose 0.5 percent on the month in May, from a revised 0.3 percent lift in April. Core and control group level figures also rose by the same amount, beating expectations, according to ANZ Bank. Industrial production and manufacturing production also rebounded from the April drop, rising 0.4 percent on the month and 0.2 percent respectively.
"Kiwi offered little resistance as the US dollar strengthened broadly on the back of some positive economic data," said ANZ FX/rates strategist Sandeep Parekh.
He said that the first-quarter domestic economic growth data Thursday will garner attention but the primary driver will be the US Federal Reserve's meeting.
"While no change is expected, markets are hoping to gauge the FOMC’s bias for future meetings," he said.
Capital Economics said the data overnight Friday will have "tempered expectations that the Fed could announce a rate cut" this week.
However, "we continue to expect that a sharper slowdown in economic growth over the coming months will eventually convince the Fed to cut rates." It added that updated projections following this week's meeting may show "one or two officials are now pencilling in cuts over the coming months. But we think most officials will want to wait for more data before pulling the trigger."
The New Zealand dollar was trading at 94.44 Australian cents from 94.67, at 51.51 British pence from 51.53, at 57.92 euro cents from 57.94, at 70.43 yen from 70.77, and at 4.4948 Chinese yuan from 4.5224.