Aussie retail puts NZ dollar in the shade

The New Zealand dollar looks headed for a slightly weaker finish for the week, cast into the shade by surprisingly strong Australian retail sales.

The kiwi traded at US64.18c at 5pm yesterday from US64.47c at the same time on Thursday and from US64.49c in New York a week ago. The trade-weighted index was at

71.25 from 71.39.

Australian retail sales rose 16.3 per cent in May, the largest jump in 38 years. The easing of lockdown restrictions across the Tasman saw spending at clothing retailers more than double, with big increases in footwear and personal accessory sales and a lift in dining out. However, the increase followed the record 17.7 per cent decline in April.

“We had some very good retail sales out of Australia,” which pushed the Aussie up against the kiwi, said Michael Johnston, a dealer at XE.

The market’s focus will remain on equities markets, which were higher on the day, but still weighed down by fears about increasing Covid cases in some large US states and this week’s outbreak in Beijing. Domestically, the market is starting to look ahead to next Wednesday’s Reserve Bank monetary policy statement.

“The big picture is three months ago we were down at US55c and we’ve screamed higher since,” Johnston said.

The NZ dollar traded at A93.60c from A93.69c late on Thursday, at 51.65 British pence from 51.33 pence, at 57.24 euro cents from 57.25 cents, at 68.59 yen from 68.87 yen and 4.5491 Chinese yuan from 4.5480 yuan.

The bid price on the two-year swap was at

0.1850 per cent from 0.2100 per cent, while the 10-year swap was at 0.7225 per cent from

0.7200 per cent on Thursday.