The New Zealand dollar dipped towards two-year lows on Friday after-weaker-than-expected retail sales data backed views that interest rates would fall further.

* NZ dollar trades as low as $0.65 in local session but holds above the two-year trough of $0.6438 reached on Thursday after the central bank cut interest rates by more than expected.

* Kiwi comes under light selling pressure after data shows retail sales fell 0.8 percent in July, more than the 0.3 percent decline forecast by economists in a Reuters poll.

* Reserve Bank of New Zealand surprised on Thursday with a 50 basis point cut to 7.5 percent. A Reuters poll after the decision shows analysts expect a 25 basis point cut in the October review with rates at 7 percent by the end of the year.

* NZ dollar seen supported around $0.6440 with resistance around $0.6560.

* NZ bonds extend previous day’s strong rally after the RBNZ rate decision.

* NZ two-year swap rate at 6.92/95 percent compared with Thursday’s 7.03 percent.

Source: http://www.afxnews.com

Related Content