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  • NZD/USD closed Tuesday FX trade flat just below 0.7050, around which the pair still trades.
  • Strong gains in manufacturing sales in Q3 was largely ignored by markets.

NZD/USD was subdued for the most part during Tuesday FX market trade, with gains in the pair capped below the 0.7050 level for most of the US session before closing the day flat.

NZD shrugs off expected strong rebound in manufacturing sales

New Zealand Manufacturing Sales Volumes surged a record 17.3% in Q3 2020 following Q2’s record 12.2% contraction. Of course, while the initial sales drop was driven by global lockdowns to contain the initial wave of the Covid-19 pandemic, the subsequent sharp rise in sales was driven by global reopening, although some might have been slightly taken aback at just how strong the rebound was. Still, NZD was not impressed, or rather has its focus elsewhere.

Much timelier data on the New Zealand economy is released at 21:45GMT on Wednesday; Electronic Card Retail Sales for November. Westpac “expect a modest 0.3% pullback in spending in November… A result in line with our forecast would still leave spending at firm levels. Black Friday/cyber Monday sales signal some upside risk to our forecast.”

Note that NZD/USD is, as usual, most likely to trade more of a function of global risk appetite dynamics as opposed to on domestic economic data.