The New Zealand dollar rose to its highest in more than three months after disappointing US retail sales and producer prices data pushed out expectations for when the Federal Reserve will likely raise interest rates.
The kiwi hit 68.14 US cents, its highest level since June 30, and was trading at 67.85 cents at 8am in Wellington, from 66.77 cents at 5pm yesterday. The trade-weighted index advanced to 72.49 from 71.64 yesterday.
The US dollar index, which measures the greenback against a basket of currencies, fell to a seven-week low after reports for September showed US retail sales rose by just 0.1 percent and producer prices fell by 1.1 percent, the biggest decline in eight months. The weak data increased speculation the Fed may hold off from raising interest rates this year.
"The US dollar weakened against all of its peers overnight," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "The market has further reduced its expectation of a Fed hike by year-end."
In New Zealand today, traders will be eyeing the BNZ-BusinessNZ performance of manufacturing index and the ANZ-Roy Morgan consumer confidence index for a gauge on how the economy is tracking.
