The NZD/USD rose over half a cent, nearly reaching the post-float high of 78.80 US cents following stronger than expected retail sales data.
It later retreated following a RBNZ warning it would continue to intervene in the market if necessary before returning near post-float highs in the overnight session.
Retail sales climbed in May by 1.2%, much higher than expectations of 0.4%. The increase was mainly due to higher car and supermarket sales. Core sales, which exclude car and fuel sales, rose 0.8% in May. The strong data raised speculation the RBNZ may need to raise interest rates at this month's official cash rate Review.
The market awaits the June quarter CPI data which is due on Monday as this will key in the RBNZ decision on whether to raise the OCR this month.
NZ weaker
New Zealand government bonds weakened significantly at the end of last week after a stronger than expected retail sales result and US Treasuries that weakened with a stronger US sharemarket.
The New Zealand two-year government bond ended up 10 basis points at 7.61% and the 10 year bond was up six basis points at 6.82%.
