SYDNEY, April 30 (Reuters) - The Australian dollar snapped a six-day winning streak on Tuesday as a surprisingly weak retail sales report trimmed some of the rate hike bets that followed a hot inflation reading, while bonds extended their rally.
The Aussie AUD=D3 fell 0.5% to $0.6531, having gained 0.5% overnight to as high as $0.6587. It climbed more than 2% over the past six trading sessions and cleared a major hurdle at the 200-day moving average of $0.6525, which is support for now.
For the month, the currency is set to eke out a meagre 0.3% gain.
The kiwi also dropped 0.5% to $0.5948, after rising 0.7% to as high as $0.5984. It, however, faces resistance at the 200-day moving average of $0.5957, having lost 0.5% for the month.
Data on Tuesday showed that retail sales in Australia unexpectedly fell 0.4% in March as cautious consumers pulled back spending, a sign that policy tightening is working to constrain demand.
That led markets, which had been wrong footed by a hot first quarter inflation report, to pare back the risk of another rate hike by September to 26%, from 45% before the data.
0#RBAWATCH Bond futures rallied for a second day. Three-year bond yields AU3YT=RR fell 8 basis points to 4.042%, while ten-year AU10YT=RR slid 8 bps to 4.417%.
"It's a pretty flat looking trend in retail sales. I don't think it really changes the picture much," said Su-Lin Ong, chief economist at RBC Capital Markets, who has pushed out her call for any rate cuts to next year after the inflation report.
"The markets have embraced for a bit of a hawkish standing from the RBA next week and that will keep rate hike speculation around for probably at least the next few months."
In New Zealand, an ANZ bank survey showed that business confidence fell in April amid a weakening in activity and profitability indicator.
Two-year swap rates NZDSM3NB2Y= fell 7 bps to 5.107%.
