The New Zealand dollar hovered near a one-week high on Thursday as third-quarter retail sales figures were better than expected, while the Australian dollar steadied above a recent 5-month trough. The New Zealand dollar jumped to a high of $0.6894 after data showed retail sales volumes rose 0.2 percent in the September quarter, adding to strong growth of 1.6 percent and 1.8 percent in the previous two quarters. On an annual basis, core volumes advanced at a healthy 4.5 percent clip.
However, the kiwi dollar was unable to hold on to its gains and was last down 0.2 percent at $0.6876 as analysts were less hopeful the momentum could continue. "We suspect that at a time when the asset side of households' balance sheets are looking a little less rosy, households will look to build precautionary savings," ANZ economists said in a note to clients. The Australian dollar was steady at $0.7613 after climbing overnight from a low of $0.7529 set on Tuesday.
The gains came after the US Federal Reserve released the minutes of its November policy meeting, sparking speculation the Fed might not tighten as aggressively as previously thought. New Zealand government bonds gained, sending yields 2 basis points lower at the long end of the curve. Australian government bond futures were mixed, with the three-year bond contract flat at 98.060. The 10-year contract up 1.5 ticks at 97.475.
Trading was generally muted with Japanese markets closed for a holiday and the United States off for Thanksgiving. Local traders were also glued to their television sets as the first Ashes cricket test between Australia and England got underway.
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