KEY POINTS:
The New Zealand dollar built up a head of steam after strong retail figures today but lost some momentum at the close.
By 5pm the New Zealand dollar was trading at session lows of US78.21c, after earlier spiking to US78.70c on a surprisingly strong 1.2 per cent rise in May retail sales. It closed yesterday at US78.07c.
Since the retail data, "profit-takers have emerged from a number of quarters and also in part, the US dollar has steadied in Asia today," Bank of New Zealand chief currency dealer Mike Symonds said.
The data-based spike also sent the kiwi to A90.75c against the Australian dollar but it fell away to A90.24c (A90.56c) by the end of the day.
Against the yen, however, the kiwi firmed to 95.78 yen (94.51 yen yesterday), following last night's surge to 96 yen after the Bank of Japan left interest rates unchanged.
The trade-weighted index was at 75.08 from 75.03.
Today's retail figures were from a "volatile series at the best of times", but they certainly kept the pressure on the Reserve Bank in term of another possible interest rate rise, Mr Symonds said.
A Reserve Bank press release this afternoon, which sought to clarify its policies around currency intervention, appeared to have had no effect on the currency.
The market's focus now turned to spending data, including the second quarter consumer price index out on Monday.
Mr Symonds said the kiwi was still strong but had had a significant run-up in recent weeks and there were signs it was overstretched.
Overnight he picked it for a possible rundown to US78c but it would require a break below US77.80c before there was a series correction.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US78.21c US78.07c
NZ dlr/Aust dlr A90.24c A90.56c
NZ dlr/euro 0.5675 0.5676
NZ dlr/yen 95.78 94.51
NZ dlr/stg 38.56p 38.43p
NZ TWI 75.08 75.03
Australian dollar US86.66c US86.17c
Euro/US dollar 1.3781 1.3751
US dollar/yen 122.44 122.35
- NZPA