Wellington, Feb 12 NZPA - The New Zealand dollar ended off its best levels today after retail sales data came in lower than expected.

The NZ dollar was US69.73c at 5pm from US70.05c at 8am and US69.79c at 5pm yesterday. It fell from around US70.10c just before news that retail sales were flat in December. The rise in retail sales in the December quarter of 1 percent was less than the 1.4 percent the markets was expecting, according to Reuters.

The weakness in the retail sector came after Real Estate Institute of New Zealand data showed a 17 percent fall in house sales in January, suggesting the property market recovery was running out of steam.

"This latest data sees us leaning towards a September, rather than June, start to the Reserve Bank of New Zealand's tightening cycle," Goldman Sachs JBWere New Zealand economist Philip Borkin said.

TD Securities said the housing data should be treated with caution but on balance New Zealand data in recent weeks had "cooled".

"The NZ dollar remains at US70c reflecting the complete loss of interest in a near-term interest rate move."

The currency was around US76c in October 2009 when interest rate expectations were for plus 50 basis points in the first quarter of 2010.

"We recently lowered our mid-year NZ dollar target from US77c to US72c," said TD Securities.

The Australian dollar pared some of its gains against the US dollar on Friday, but held ground near a decade high on the euro and advanced to a two-month peak against the NZ dollar. The NZ dollar was at A78.39c at 5pm from US78.58c at the same time yesterday.

There is still considerable uncertainty in Europe for investors. The European Union pledged solidarity with Greece, but did not offer anything specific to assist with its debt problems.

The NZ dollar was at 0.5100 at 5pm from 0.5062 at the same time yesterday and was at 62.53 yen from 62.72 yen.

The trade weighted index stood at 64.53 at 5pm.