Bloomberg News

N.Z. Dollar Rises to 6-Month High Versus Yen After Retail Sales

February 15, 2012

Feb. 15 (Bloomberg) -- The New Zealand dollar rose to a six-month high versus the yen after the nation’s fourth-quarter retail sales increased more than economists estimated.

The Australian and New Zealand currencies gained against the majority of their 16 most-traded peers after People’s Bank of China Governor Zhou Xiaochuan said his nation will participate in resolving Europe’s debt crisis. The Aussie advanced after a private survey showed Australian consumer confidence rose by the most in three months as two interest-rate reductions late last year improved the financial outlook for households.

“Retail numbers are undoubtedly kiwi supportive,” said Mike Jones, a foreign-exchange strategist at Bank of New Zealand in Wellington, using the nickname for the nation’s currency. “We’ll see markets beginning to bring forward the timing of Reserve Bank of New Zealand interest-rate hikes.”

New Zealand’s dollar rose 0.2 percent to 65.51 yen after touching 66.12 yen, the most since Aug. 5. The kiwi advanced 0.4 percent to 83.72 U.S. cents.

Australia’s dollar gained 0.4 percent to $1.0734. It touched 84.61 yen, the highest since Aug. 4, before trading at 83.98, 0.1 percent above yesterday’s close.

Retail sales in New Zealand adjusted for inflation rose 2.2 percent in the three months through December from the previous quarter, when they gained a revised 2.4 percent, a report showed today. Sales were forecast to climb 1.2 percent, according to the median estimate in a Bloomberg News survey.

Reserve Bank Policy

Traders are betting New Zealand’s central bank will raise rates 0.14 percentage point over the next 12 months, according to a Credit Suisse Group AG index based on swaps. On Feb. 6, bets went from a cut to an increase. RBNZ Governor Alan Bollard has kept the official cash rate at a record-low 2.5 percent since March.

The South Pacific currencies advanced after China’s Zhou said his nation is ready to be more involved in resolving the euro crisis through the European Financial Stability Facility and European Stability Mechanism, echoing comments made yesterday by Premier Wen Jiabao at a joint press conference with European Union President Herman Van Rompuy.

“The Aussie dollar is at quite lofty levels, but I think the upward momentum is still continuing,” said Takuya Kawabata, a researcher at Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency-margin company. China’s pledge to help Europe resolve its debt crisis “can have a positive knee-jerk impact on riskier assets.”

In Australia, the consumer sentiment index for February advanced 4.2 percent to 101.1, the highest since November, a Westpac Banking Corp. and Melbourne Institute survey taken Feb. 6-10 of 1,200 consumers showed today in Sydney.

--With assistance from Allison Bennett in New York. Editor: Kenneth Pringle

To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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