NZD/USD calm despite soft NZ retail sales

The New Zealand dollar has started the week quietly. NZD/USD is currently trading at 0.6536, up 0.04% on the day.

NZ retail sales suffer double-digit drop

New Zealand retail sales are published each quarter, magnifying the impact of each release. Retail sales declined by 14.6% in the second quarter, much worse than the reading of -0.7% in the previous quarter. Core retail sales weren’t much better, with a decline of 13.7%, the first decline since 2013. The double-digit losses were reflective of the severe economic conditions due to the Corvid-19 pandemic. However, both releases beat their estimates, so the soft numbers didn’t pull down the New Zealand dollar.

Earlier in August, the Governor of the Reserve Bank, Adrian Orr, announced that the Monetary Policy Committee had agreed on a package of “additional monetary instruments”. One of those tools is apparently negative interest rates, which could be introduced early next year. There is considerable controversy surrounding negative interest rates; the US Federal Reserve, for example, has ruled out such a move. As well, ASB Senior Economist Mark Smith noted that the Australia central bank is staunchly against negative rates. This means that there would be currency implications if New Zealand rates fall into negative territory.

.

NZD/USD Technical

NZD/USD is trading at 0.6609, down 0.04% on the day. The pair has shown little activity in the Asian and European sessions

• 0.6523 is a weak support line. This is followed by support at 0.6399
• 0.6556 was tested earlier under the day and is under pressure. This is followed by resistance at 0.6633
• The 10-day MA remains relevant, just above the pair

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.