NZ dollar mixed; shrugs off data, coronavirus news

In the US, a further 71,670 people were reported as infected with Covid-19 on Wednesday. Photo / Getty Images

The New Zealand dollar was largely unmoved by either local or offshore economic data or the worsening coronavirus pandemic in the United States.

The kiwi was trading at 65.62 US cents at 5pm in Wellington from 65.49 cents at the same time yesterday while the trade-weighted index was at 72.22 from 72.07.

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Data released locally today showed deflation of 0.5 per cent in the June quarter, with the nation in lockdown for much of those three months, taking the annual inflation rate to 1.5 per cent, down from 2.5 per cent in the year ended March.

Philip Poppe, a director at Forex, said there was little market reaction because it was more or less as expected, and the data is regarded as "largely historical."

Across the Tasman, jobs data showed a better-than-expected increase in jobs, but they were all part-time, and the unemployment rate of 7.4 per cent was marginally higher than expected. The Australian dollar barely reacted.

Data from China showing weaker-than-expected retail sales in June weighed a little because it showed China's recovery from the pandemic remains patchy.

In the US, a further 71,670 people were reported as infected with Covid-19 on Wednesday, just below the previous daily record set last Friday. Deaths in the US are also starting to rise again after months of decline.

"The market is progressively ignoring the Covid thing. We're just not seeing any reaction to it. With the way it's rolling out in America, there should be more reaction," Poppe said.

US retail sales data for June will be released later today and economists are expecting an increase of about 5 per cent following May's 17.7 per cent rebound. Reflecting the impact of the pandemic, US retail sales fell 8.2 per cent in March and 14.7 per cent in April.

The New Zealand dollar was trading at 93.82 Australian cents from 93.58 cents at 5pm yesterday, at 52.24 British pence from 52.07 pence, at 57.55 euro cents from 57.45 cents, at 70.13 yen from 70.23 yen and at 4.5904 Chinese yuan from 4.5841 yuan.

The bid price on the two-year swap rate was unchanged at 0.2000 per cent while the 10-year swap was at 0.7150 per cent from 0.7200 per cent yesterday.