You are using an older browser version. Please use a supported version for the best MSN experience.

Kiwi slips as Australian sales miss target

NZN 4/04/2016 Paul McBeth

The New Zealand dollar fell in tandem with its trans-Tasman counterpart after flat Australian retail sales fell short of expectations and eroded demand for both currencies.

The kiwi slipped to 68.76 US cents at 5pm in Wellington from 68.88 cents at 8am and 68.98 cents on Friday in New York. The trade-weighted index dropped to 72.67 from 72.88 last week.

The Australian dollar dropped almost half a US cent after Bureau of Statistics figures showed flat retail sales in February, missing expectations for growth of 0.4 per cent. That followed a mixed US jobs report on Friday which showed stronger employment growth but an increase in the unemployment rate.

"Housing is a little bit soft over that side of the ditch, particularly apartments, so that's weighing on people using their house as an ATM," said Graham Parlane, private client manager at OMF.

A Reserve Bank of Australia policy review on Tuesday is expected to keep the target cash rate at 2 per cent as the central bank weighs up low inflation against signs of life in its economy. The kiwi increased to 90.09 Australian cents from 89.92 cents last week.

A BusinessDesk survey of 12 analysts predicts the local currency will trade between 67.20 US cents and 71 cents this week. Five expect the kiwi to gain, five project it will fall, and two say it will stay largely unchanged

OMF's Parlane said traders will be watching the RBA review, speeches by Federal Reserve officials including chair Janet Yellen, and the latest GlobalDairyTrade auction for the kiwi's direction.

New Zealand's two-year swap rate fell four basis points to 2.16 per cent at 5pm in Wellington, and 10-year swaps sank seven basis points to 2.93 per cent.

The local currency declined to 4.4534 Chinese yuan from 4.4682 yuan last week, and dropped to 76.66 yen from 77.02 yen. It slipped to 48.33 British pence from 48.46 pence and fell to 60.38 euro cents from 60.57 cents.

image beaconimage beaconimage beacon