The new Zealand dollar was trading slightly higher late Wednesday after paring most of its overnight gains following the release of weaker-than-expected domestic retail sales data. Statistics New Zealand said Wednesday retail sales fell 0.4% by volume in the third quarter from the previous quarter, when they posted a 1.3% gain. Economists poll were expecting a 0.5% rise. When price changes are included, third-quarter sales fell 0.8% compared with a rise of 1.1% in the prior quarter. Economists had also expected a 0.5% rise. The surprisingly weak retail sales performance came after jobs data released last week showed the unemployment rate was at 7.3% in the third quarter, its highest level since 1999. Furthermore, third-quarter inflation was at 0.7%, below the central bank’s target band of 1%-3%.
The New Zealand dollar fell to US$0.8157 after the data were released from US$0.8193 beforehand, but the Kiwi later recovered somewhat and was trading at US$0.8171 at 0358 GMT, up slightly from US$0.8166 late Tuesday. The local currency was at 0.782 Australian dollars compared with A$0.7846 on Tuesday.
Next major events for the currency pair would be the Bank of England inflation report and U.S. retail sales data due later in the global day.
EasyForexNews Research Team