An unexpected decline in retail sales figures for June forced the New Zealand dollar to its weakest level in ten weeks yesterday.

It traded at 73.44 US cents shortly after the release of the data, down from 73.96 cents, according to Bloomberg. Retail sales dropped by 0.6 per cent despite analyst predictions that expected figures to remain stable.

Currency strategist Joanne Masters of Macquarie Bank in Sydney told the newspaper the currency is "vulnerable".

"Markets have been on the lookout for weaker data after the aggressive policy tightening," she said, adding that they are watching whether a dramatic economic slowdown is on the cards.

Uncertain financial markets had been beneficial to the kiwi, according to the country's finance minister Michael Cullen.

The New Zealand Herald quotes him as saying market "jitters" have led to traders wanting to sell the inflated dollar.

"From New Zealand's perspective it is not unhelpful in taking some of the heat again out of the New Zealand dollar because of the flow on effects," Dr Cullen reportedly said.