The New Zealand dollar took a dive today after weaker than expected retail sales data for January.
Statistics New Zealand said retail sales figures for January were unchanged from December, against economists' forecasts of a 0.6 percent rise.
Excluding cars, sales were up 0.1 percent.
The kiwi slumped across the
board today, falling 1 percent to 20 month lows against the US dollar and hitting two year lows against the Australian dollar.
At 5pm the kiwi was fetching a session low of US63.30c, over US1c lower than the US64.27c it was fetching at the same time yesterday, and down from US64.16c it was fetching before this morning's data release.
The retail sales data reinforced economists' views that the Reserve Bank was likely to cut interest rates before the end of the year, despite RB governor Alan Bollard saying last week he did not expect an easing this year.
The kiwi also dropped against its Australian counterpart, falling to A86.38c at 5pm today from A87.64c at the local close yesterday.
The likelihood that interest rates will fall has pushed the kiwi out of favour despite New Zealand having the highest interest rates in the developed world.
The focus will also soon fall on New Zealand's massive current account deficit. The December quarter data due on March 23 is likely to show the deficit ballooning out to nearly 9 percent of GDP.
The US dollar lost ground against other major currencies as support from last week's strong US jobs report evaporated.
Traders said the US dollar's inability to hold last Friday's gains on the stronger-than-expected rise in February US non-farm payrolls suggests future interest rate increases may already be factored into the dollar.
5pm today 5pm Monday
NZ dlr US63.30c US64.27c
NZ dlr/Aust dlr A86.38c A87.64c
NZ dlr/euro 0.5292 0.5380
NZ dlr/yen 75.06 76.44
NZ dlr/stg 36.50p 37.22p
NZ TWI 65.43 67.50
Australian dollar US73.30c US73.32c
Euro/US dollar US1.1965 US1.1946
US dollar/yen 118.56 118.93
- NZPA
