The sound of ringing cash registers buoyed the New Zealand dollar across the board today.
At 5pm today the kiwi was fetching US70.72c from US70.42c at 5pm yesterday, boosted by stronger than expected retail sales data for July.
Retail sales rose 1.8 percent, more than double the 0.7 percent percent rise economists had expected. While the Lions rugby tour was a major factor behind the jump, rising petrol prices also played a part.
The Reserve Bank issues its Monetary Policy Statement tomorrow and is tipped to keep the official cash rate unchanged at 6.75. But the central bank is expected to maintain a hawkish tone as inflation looks set to rise over the bank's 1-3 percent target in the September quarter .
Deutsche Bank economist Darren Gibbs said the inflationary risks meant the Reserve Bank was likely to take longer to lower rates than previously expected.
"The Reserve Bank has talked about upside risks to consumer spending, and the data is bearing those risks out, so plenty to keep the RBNZ in hawkish mode tomorrow morning.'
The MPS will be followed by an economic manufacturing survey for the June quarter on Friday and the general election on Saturday.
-NZPA
<EM>Currency:</EM> Kiwi rises as retail sales boom
AdvertisementAdvertise with NZME.