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NZ Dollar Makes Little Headway After Early Gains

Fuseworks Media
Fuseworks Media

Wellington, May 16 NZPA - The New Zealand dollar failed to build on its overnight gains, sticking to a very tight range in lacklustre trading today.

Yesterday, a surprise slide in retail trade figures a week after poor job data sent the kiwi to a four-month low against the US dollar.

By 5pm, the kiwi was at US76.47c, up slightly from this morning's open of US76.35c and well above US75.65c late yesterday afternoon.

"We corrected from last night's lows pretty much, and since then have done nothing really," said HSBC senior manager Daniel Brdanovic.

The market appeared to have got caught short after the data, and as a result had to buy back the kiwi.

Despite today's narrow 25-point range, volatility was likely to continue ahead of the Reserve Bank's June 5 interest rate decision.

"Especially with the last two bits of data that have been rather negative, the chances have increased for a move in June, and as a result the kiwi has been sold quite heavily," Mr Brdanovic said.

Against the Aussie, the kiwi had softened to A80.87c from A81.19c late yesterday, while it gained against the euro, yen and sterling.

On the trade weighted index, the kiwi was at 68.45 from 67.96.

The US dollar struggled to sustain gains against other currencies as weak economic data raised concerns about US growth prospects.

Strong first-quarter growth in Germany and France helped support the euro as the data highlighted the relative strength of the European economy compared with that of the United States.

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