NZ dollar drops vs greenback after rally

The Kiwi may trade between 85 US cents and 86.30 cents today, said one market strategist. Photo / File
The Kiwi may trade between 85 US cents and 86.30 cents today, said one market strategist. Photo / File

The soaring New Zealand dollar fell after weaker than expected retail spending in the US sapped investors' appetite for higher-yielding assets, pushing stocks on Wall Street lower on Friday and dragging down risk-sensitive currencies.

The kiwi fell to 85.67 US cents at 8.30am in Wellington from 85.88 cents on Friday in New York, and the trade-weighted index declined to 75.63 from 78.79 last week.

Stocks on Wall Street halted their week-long rally on Friday after Commerce Department figures showed US retail sales shrank 0.4 percent in March. That prompted investors to pare back their bets on riskier assets, including the kiwi dollar.

"The kiwi is doing a healthy correction after that big rally. The Friday night catalyst was the horrible US data," said Imre Speizer, market strategist at Westpac Banking in Auckland. "I fancy this correction for a bit further, but the kiwi's still in an up-trend."

The currency may trade between 85 US cents and 86.30 cents today, he said.

Traders will be looking for official Chinese figures for the first quarter today, which are expected to show the world's second-biggest economy grew at an annual pace of 8 per cent in the year ended March 31.

The kiwi fell to 84.18 yen at 8.30am in Wellington from 84.36 yen last week, and decreased to 81.48 Australian cents from 81.62 cents. It slipped to 65.33 euro cents from 65.42 cents last week, and was little changed at 55.86 British pence from 5.91 pence.

- BusinessDesk

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