The New Zealand dollar rose above 85 US cents for the first time since September 2011 amid expectations retail sales figures today will add to a string of strong data this week suggesting the economy is a standout in a tepid globe.
The kiwi dollar recently traded at 84.80 US cents and earlier rose as high as 85.14 cents, from 84.74 cents at 5pm in Wellington yesterday. The trade-weighted index rose to 77.02 from 76.88, then highest since July 2007, when former Reserve Bank governor Alan Bollard intervened in the currency market to drive the kiwi lower.
Intervention isn't expected this time round, as Finance Minister Bill English this week likened such a move as "a peashooter in a war zone." Retail sales volumes in the fourth quarter surged 1.4 per cent, rebounding from a 0.4 per cent fall three months earlier. The report follows surveys showing rising consumer confidence and an expanding manufacturing sector.
"It's very hard to see the kiwi coming off yet," said Tim Kelleher, head of institutional FX sales at ASB Institutional. "Retail sales are expected to be a strong number. Add in that strong data we had yesterday and it's hard to see the kiwi dropping."
The New Zealand dollar edged up to 81.96 Australian cents from 81.85 cents and gained to 63.55 euro cents from 63.03 cents after a string of shrinking gross domestic product numbers from euro-zone economies. It rose to 54.76 British pence from 54.58 pence.