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When is the New Zealand Q1 Retail Sales and how could it affect NZD/USD?

Overview of quarterly retail sales

Early Monday in Asia, at 21:45 GMT Sunday elsewhere, sees the quarterly retail sales data from the Statistics New Zealand. With the recent updates from the Reserve Bank of New Zealand (RBNZ) suggesting inflation fears, same like their US counterparts, today’s New Zealand (NZ) Retail Sales for the first quarter (Q1) becomes the key for NZD/USD traders.

The early signal for the NZ Retail Sales, NZ Credit Card Spending, rallied with a whopping 87.4% on Friday, which in turn suggests upside risk to today’s data. Even so, market forecasts signal a downbeat -4.4% QoQ and +1.9% YoY figures, versus -2.7% and +4.8% respective priors.

Ahead of the release, analysts at Westpac said,

We’re forecasting a modest 0.7% rise in  retail spending  in the March quarter. New Zealand’s recovery is gaining traction and households are continuing to spend up on durable items. However, spending continues to be dampened by the sharp slowdown in population growth and the absence of tourists during the normal summer peak.

How could it affect NZD/USD?

NZD/USD has been pressured in the last two weeks amid challenges to the RBNZ’s easy money policy, mainly from the inflation point of view. The pair drops to 0.7170 by the press time of early Monday morning in Asia. The quote’s latest weakness could be traced from the increased chatters over the US Federal Reserve’s (Fed) next move, mainly due to Friday’s strong PMIs, as well as fears of another round of US-China tussles over the covid outbreak.

That said, today’s NZ Retail Sales for Q1 are likely to exert additional pressure on the RBNZ officials to accept the reflation fears. Though, Governor Adrian Orr and company isn’t famous for roiling the kiwi bulls and hence the policymakers may sound cautious, but not too fearful, during this week’s RBNZ meeting even if today’s day print heavy gains. Alternatively, a negative surprise, or matching the downbeat forecasts, could help the RBNZ board to reiterate their bullish bias for the economy while pushing back the rate decisions to the next year. Overall, today’s Retail Sales becomes important for the day but not too crucial to change the course of the RBNZ moves and hence should be considered as a short-term catalyst.

Technically, NZD/USD forms a bearish head-and-shoulders chart pattern that needs confirmation by a downside break of 0.7140 to direct sellers, theoretically, towards the sub-0.7000 region. Meanwhile, 0.7270 and 0.7310 restrict the kiwi pair’s short-term upside.

Key quotes

 

NZD/USD remains pressured below 0.7200 ahead of NZ Retail Sales

About New Zealand Retail Sales

The Retail Sales released by the  Statistics New Zealand measures the total receipts of retail stores. Quarterly percent changes reflect the rate of changes in such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative (or bearish).

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