NZ dollar drifts, ends around US70c level

The New Zealand dollar drifted lower for most of a quiet session but recovered to finish near where it started.

The dollar was US69.98c at 5pm from US70.03c at 8am and US69.80c at 5pm yesterday. It had dropped to about US69.65c overnight in the wake of the Reserve Bank's decision yesterday to leave the official cash rate unchanged at 2.5 per cent.

Today the focus was on retail sales data for January which was disappointing.

"The headline number was a little bit stronger but the more important ex-auto number was weaker than expected so the pulse of spending continues to disappoint," said BNZ strategist Mike Jones.

The data had the most impact on the cross against the Australian dollar which was at A76.38c at 5pm. It traded as low as A76.29c, just off the A76.20c nine-and-a-half year low last week.

"New Zealand interest rates relative to Australian interest rates are at the lowest level in 15 years," Mr Jones said.

He expected the focus to return to the outlook for the global economy and sovereign debt situations with a light local economic data diary next week.

The yen dipped today on speculation that the Bank of Japan could further relax monetary policy while the US dollar was softer ahead of US retail sales data, Reuters reported.

The NZ dollar was at 63.41 yen at 5pm from 63.00 yen at the same time yesterday. It was at 0.5109 euro from 0.5120 yesterday.

The trade weighted index was 64.61 at 5pm from 64.58 yesterday.

- NZPA