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Kiwi up after drop in Aussie retail sales

NZ Newswire logoNZ Newswire 3/04/2017 Jonathan Underhill
A new $5 note. © Mark Tantrum/Getty Images A new $5 note.

The New Zealand dollar rose against its Australian counterpart on Monday after figures showed Australian retail sales unexpectedly fell in February.

This raised concerns about whether households across the Tasman are robust enough to drive economic growth.

The kiwi dollar traded at A92.02c as at 5pm in Wellington from 91.57c at the start of the day and from 91.78c on Friday in New York. The kiwi traded at US70.03c from 70.08c in New York last week.

Australian figures showed retail sales fell 0.1 per cent in February, against analyst expectations for a 0.3 per cent gain.

That weighed on the Australian dollar even as other data showed approvals to build new homes jumped 8.3 per cent in February, exceeding forecasts.

With little in the way of New Zealand economic releases scheduled this week, the GlobalDairyTrade auction is likely to be the major local focus, especially given the price of whole milk powder gained at the last auction when dairy futures were pointing to a decline.

"We've seen a bit of buying versus the Aussie dollar as Australian retail sales underwhelmed," said Graham Parlane, private client manager at OMF.

"In the big picture, the Australian dollar has gone from pricing in cuts (in interest rates) to things being far more stable."

Mr Parlane said with less volume being offered for this week's dairy auction there's scope for prices to rise again.

The New Zealand dollar fell to 65.56 euro cents from 65.71c at the end of last week.

The euro advanced last week after reports that the European Central Bank may be ready to wind back its policy of easy monetary conditions but Mr Parlane said the ECB then signalled that the market had misinterpreted its position.

The kiwi traded at 55.84 British pence from 55.89 pence, slipped to 77.97 yen from 78.03 yen and fell to 4.8210 yuan from 4.8244 yuan.

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