NZ dollar drops to two-week low

Photo / File
Photo / File

The New Zealand dollar fell to a two-week low after weaker-than-expected Japanese growth figures sapped risk appetite and traders awaited retail sales data locally and economic growth and inflation data out of Europe.

The kiwi dollar traded at 80.90 US cents, down from 81.14 cents at 5 pm yesterday. The trade-weighted index slipped to 72.74 from 72.98.

Japan's economy grew 0.3 per cent in the second quarter, less than half the pace expected. Figures today are expected to show New Zealand retail sales rose 0.7 per cent in the second quarter, after contracting three months earlier.

In Europe today, data may show gross domestic product shrank 0.2 per cent last quarter while US data this week includes retail sales, consumer prices and industrial production.

"There was a bit of risk coming off overnight with Japanese GDP being a bit weak," said Stuart Ive, currency strategist at HiFX. With the raft of global economic data pending, "we're seeing long positions coming off".

Ive says the kiwi may trade in a range of 80.70 US cents to 81.30 cents today. The retail sales report "could nudge the kiwi one way or the other" but "local data is a very small part in a very big picture".

Stocks fell in the US overnight, with the Dow Jones Industrial Average falling 0.3 per cent, while US Treasury bonds gained, pushing yields lower. Gold weakened overnight amid speculation central banks may not provide the additional stimulus some in the market are betting on.

The kiwi dollar was little changed at 76.84 Australian cents and fell to 51.56 British pence from 51.75 pence late yesterday.

The New Zealand dollar fell to 65.57 euro cents from 66 cents as the euro gained against the greenback. The kiwi fell to 63.34 yen from 63.52 yen.

- BusinessDesk

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