NZ dollar rises on retail sales data

File photo / NZ Herald

The New Zealand dollar rose today after retail sales data was better than expected.

It was US71.41c at 5pm, having risen more than half a US cent in response to the data. It was US71.89c at 8am and US71.27c at 5pm on Friday.

The local currency had earlier fallen below US71c for the first time in three weeks, after weekly jobless claims rose unexpectedly in the United States and euro zone data was weaker than expected, spurring safe-haven demand.

But news that retail sales volumes surged 1.3 per cent in the June quarter returned investors' focus to the local economy. This compared to expectations of about a 0.3 per cent rise.

"The market has got so used to rubbish data and this one popped out as a surprise," said Imre Speizer, senior currency strategist at Westpac.

"I still think Kiwi is weak overall on a multi-week basis. I think it topped out about a week ago," he said.

The surprise boost to sales volumes may see some forecasters revise up their picks for second quarter gross domestic product, Westpac economists said in a commentary.

"For now we're comfortable with our forecast of 0.7 per cent GDP growth, which incorporates a 0.7 per cent rise in private consumption," he said.

The data also kept alive the chances of another rate rise by the central bank in September.

The NZ dollar was at 0.5555 euro, at 5pm from 0.5536 at the same time yesterday and at 61.46 yen from 60.78 yen yesterday. It was at A79.28c from A79.57c yesterday.

The trade weighted index rose to 66.70 from 66.51 yesterday.

- NZPA