NZ dollar little changed after retail sales figures, Northern summer thins out trading
By Paul McBeth
Aug 14 (BusinessDesk) - The New Zealand dollar was little changed in local trading after upbeat retail sales figures showed consumer spending kept growing in the country’s housing related sectors, and as trading remains thin during the height of the Northern Hemisphere summer.
The kiwi traded at 79.82 US cents at 5pm in Wellington from 79.64 cents at 8am and 79.97 cents yesterday. The trade-weighted index edged up to 75.36 from 75.21 yesterday.
New Zealand’s retail sales rose 1.7 percent in the second three months of the year, beating estimates, as spending on hospitality grew by the most in a quarter ever, and as consumers kept up their purchases on house-related goods amid bubbling property markets in its two biggest cities, Auckland and Christchurch.
“Retail sales were pretty much on expectations, with strength in the normal areas – cars and housing stuff,” said Tim Kelleher, head of FX sales NZ at ASB Institutional in Auckland. “We’re still sellers (of kiwi) between 81 US cents and 82 cents on the rallies.”
ASB’s Kelleher said trading desks in the Northern Hemisphere are lighter than usual for summer holidays, and that the kiwi has the potential to get pushed around by a Fairfax Media report today that Fonterra Cooperative Group’s tainted food scare may have started from a farm rather than a dirty pipe.
Vet and farm consultant Frank Rowson doubts the bacteria originated in Fonterra’s Hautapu plant and that the dairy exporter should be tracing the source back to the farms and their water sources, Fairfax reported.
The world’s biggest dairy exporter, and New Zealand’s largest company, was caught up in a global food scare last week when it announced the discovery of potentially tainted whey protein concentrate had been sold to some customers. The subsequent fall-out was limited, though China, Russia, Belarus and Kazakhstan have imposed some import restrictions on Fonterra products.
The kiwi increased to 60.19 euro cents at 5pm in Wellington from 60.05 cents yesterday ahead of euro-zone gross domestic product figures, which will probably show the region clawed itself out of a year-and-a-half-long recession. The local currency traded at 51.69 British pence from 51.68 pence yesterday before the Bank of England releases the minutes to its latest policy meeting.
The kiwi rose to 87.75 Australian cents from 87.47 cents yesterday, and advanced to 78.29 yen from 77.78 yen.