The New Zealand dollar fell against the greenback after first quarter retail spending was softer-than-expected, pointing to sluggish economic growth.

The kiwi dropped to 68.97 US cents as at 5pm versus 69.26 cents at 8am and 69.10 cents on Friday in New York. The trade-weighted index was at 72.50 from 72.58.

Retail sales volumes rose 0.1 per cent in the March quarter on an adjusted basis for seasonal and price effects, from a revised 1.4 per cent gain in the fourth quarter, Statistics New Zealand said. Economists had expected retail sales volumes to lift 1 per cent.

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"This signals downside risk to our Q1 GDP forecast and chimes with other signs that the economy is slowing," said Westpac Banking Corp senior economist Satish Ranchhod in a note. The gross domestic product data is due June 21, according to Stats NZ.


"It was incredibly disappointing. The market was expecting it to be a slightly more upbeat number than that, in particular after the partial indicators looked reasonably good," said Ross Weston, a senior trader at Kiwibank.

He said the kiwi looked like it was heading for a bounce early in the session after markets were cheered by improving US-China trade relations but "the retail sales data took care of that".

Weston said the kiwi is now floating around the 69 US cents level "waiting for a convincing break either way."

In order for it to push lower "we need much higher US yields and more US dollar strength", he said.

The kiwi traded at 91.70 Australian cents from 91.72 cents on Friday in New York and fell to 4.3999 Chinese yuan from 4.4025 yuan. It gained to 76.72 yen from 76.52 yen last week and was unchanged at 58.69 euro cents. The kiwi increased to 51.33 British pence from 51.24 pence last week.

New Zealand's two-year swap rate fell 2 basis points to 2.20 per cent while 10-year swaps fell 5 basis points to 3.22 per cent.