NZ dollar slips vs. greenback ahead of US retail sales

Published: Tue 13 Aug 2013 05:10 PM
NZ dollar slips vs. greenback ahead of US retail sales figures
By Paul McBeth
Aug 13 (BusinessDesk) - The New Zealand dollar slipped below 80 US cents ahead of retail sales figures in the US, which are expected to show consumer spending in the world’s biggest economy rose for a fourth month.
The kiwi traded at 79.97 US cents at 5pm in Wellington from 80.01 cents at 8am, down from 80.34 cents yesterday. The trade-weighted index decreased to 75.21 from 75.36 yesterday.
US retail sales rose 0.3 percent, adding to June’s 0.4 percent gain, according to a Bloomberg survey of economists. Investors are paying closer attention to data showing the US economy is recovering in anticipation the Federal Reserve will start unwinding its US$85 billion a month asset purchase programme. That puts speeches by Atlanta Fed President Dennis Lockhart and St Louis Fed President James Bullard over the next two days in focus.
“The US dollar’s direction is still the key to it all,” said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. “We’re still of the view the US dollar will grind higher, pushing the Aussie and kiwi back lower.”
CBA’s Tennent-Brown said the kiwi dollar’s resilience was surprising given last week’s news when Fonterra Cooperative Group, the country’s biggest company, warned some of its whey protein products had been contaminated with bacteria that can cause botulism.
Fonterra is the world’s biggest dairy exporter, and milk products make up about quarter of New Zealand’s export receipts.
New Zealand second-quarter retail sales will get some attention tomorrow, and are expected to show consumer spending rose 1.3 percent in the quarter in another sign the local economic recovery is building.
The kiwi traded at 87.47 Australian cents at 5pm in Wellington from 87.32 cents yesterday after a National Australia Bank survey showed businesses were pessimistic about the economy across the Tasman, and after Australia’s Treasury confirmed a deteriorating fiscal position for the Federal government, ahead of next month’s election.
The New Zealand dollar increased to 77.78 yen at 5pm in Wellington from 77.51 yen yesterday. The local currency fell to 60.05 euro cents from 60.30 yesterday and declined to 51.68 British pence from 51.87 pence.

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