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NZ Dollar Declines Against Broadly Rallying Greenback

Fuseworks Media
Fuseworks Media

Wellington, May 14 NZPA - The New Zealand dollar has slipped against the greenback as the United States currency rallied broadly after a report on US April retail sales beat forecasts.

By 8am the kiwi was buying US76.47c from US76.82c at 5pm yesterday. The level of the NZ dollar at today's local open was slightly up from Monday's low but otherwise around its weakest against the greenback in nearly four months.

Against the euro, the NZ dollar was at 0.4940 by 8am, around its lowest in four weeks, although only slightly below the 0.4948 at yesterday's local close.

Bank of New Zealand currency strategist Danica Hampton said lingering concerns about a sharp slowdown in the New Zealand economy continued to hang over the kiwi against the greenback.

First quarter retail sales figures tomorrow were expected to confirm a retail slowdown seen in earlier partial indicators and recent nasty sales reports from Briscoe and The Warehouse, she said.

Yesterday's Australian budget was pretty much in line with expectations, representing only a modest tightening of fiscal policy.

Against the Australian dollar, the kiwi was buying A81.25c at today's local open, the same level as at 5pm yesterday.

The NZ dollar did rise against the yen overnight, from 79.82 yen at the local close to 80.12 at 8am. The trade weighted index slipped overnight to 68.54 from 68.63.

In the US, retail sales, excluding the hard-pressed autos sector, increased 0.5 percent last month, more than double the increase that economists had forecast.

That followed a 0.4 percent pickup in March, suggesting that the US consumer remained resilient despite a housing market rout.

The April data supported views that the Federal Reserve will probably stop cutting US interest rates next month.

NZPA WGT Reuters mjd kn

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