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NZ$ Rises After Australian Retail Sales Data Jolts Markets

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Jan 7 NZPA - The New Zealand dollar rose to its highest level since late November today as the US dollar went on the defensive and the Australian dollar went on the offensive.

The NZ dollar was US73.78c at 5pm, up from US73.64c at 8am from US73.37c at 5pm yesterday. It rose to US74.29c, its highest level since November 19, during the session.

The US dollar was generally weaker after Federal Reserve meeting minutes suggested US officials are concerned about the winding down of economic stimulus measures.

"The Fed minutes were dovish and alluded to the fact that growth was still weak in the US and we saw a move higher in the kiwi, euro and aussie dollars," said Murray Hindley, chief currency chief dealer at ANZ.

New Zealand trade data released today was better than expected. The move above US74c, though was after Australian retail sales data was released.

Australian retail sales surged past all expectations in November to record the biggest increase in eight months, adding to the chance of a fourth straight rise in interest rates next month. The 1.4 percent jump in retail sales for November was above the median forecast of 0.3 percent.

The Australian dollar rose to a 15 month high against the yen and two month high against the euro after retail sales data.

The NZ dollar eased to A80.00c by 5pm from A80.27c at 5pm yesterday.

The Australian retail sales data revived speculation that the Reserve Bank of Australia will raise interest rates in February.

The Australian central bank has already raised its key cash rate three times in as many months to stand at 3.75 percent, far above most other developed nations.

The trade weighted index was 66.96 from 66.75.

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