The New Zealand dollar fell yesterday after retail sales data for December was weak, implying there is no need for the Reserve Bank of New Zealand to raise interest rates.
The NZ dollar was at US75.77c at 5pm, down from US76.05c at 8am and US76.01c on Friday at 5pm. Ithad dropped to a three-week low against the greenback below US75.60c during the weekend, as the United States currency benefited from a spate of economic data reflecting a recovery well under way in the US.
In New Zealand, it was the opposite story as core retail sales fell 1.2 per cent in December, indicating that "consumers have their wallets firmly shut".
Consumer spending makes up about 60 per cent of the economy, with retail spending about half of that.
TD Securities said that while weak retail data was expected it helped to continue the NZ dollar's recent losing streak and rate hike expectations had been scaled back a bit. ASB said the data added to the recent run of underwhelming data.
"There remains little urgency for the Reserve Bank to resume the reduction of monetary policy stimulus," ASB said.
The focus this week is on economic data from China.
Westpac said that technical charts also pointed to potential weakness in the currency. While a six-week range between US77.80c and US75.30c remained intact, the bottom of the range was under threat. The next target if the range is broken is US74c.
The NZ dollar fell to A75.35c from A76.04c on Friday as the Australian dollar rallied.
It was at 0.5598 euro from 0.5596 euro on Friday and at 63.06 yen from 63.42 yen. The trade weighted index was at 67.67 from 67.94.
