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Overview of quarterly retail sales

Early Friday at 22:45 GMT sees the quarterly retail sales data from the Statistics New Zealand. Despite a 50 basis points (bps) cut to the benchmark cash rate, the Reserve Bank of New Zealand (RBNZ) hasn’t stopped favoring bears, which in turn highlights the importance of each incoming data to strongly affect the Kiwi central bank’s next policy moves.

With the recently announced Credit Card Spending being on the downside, chances of a soft print from the headline retail sales data can’t be denied. Not only the headline Retail Sale but the Retail Sales ex-Autos also grew 0.7% during the first quarter (Q1) on a QoQ basis.

TD Securities expect little downside change in the upcoming data as it said,

After real retail sales rose 0.7% in Q1, we forecast a smaller 0.2% rise in retail sales volumes in Q2, with declining levels on consumer confidence weighing on activity.

How could it affect NZD/USD?

The NZD/USD pair is already testing multi-year low amid fears of global recession and the RBNZ’s bearish bias. As a result, any more weakness in the headline economic data could further drag the Kiwi pair towards the south. On the contrary, the pair is likely to recover some of the latest losses on the surprise upbeat releases (except being a small increase in the number).

Technically, the quote remains weak unless breaking the June month low of 0.6487 on the upside, which in turn keep pushing it towards January 2016 low of 0.6348 and then to September 2015 bottom surrounding 0.6235. Alternatively, August 07 trough of 0.6377 and October 2018 low near 0.6424 can satiate short-term buyers during the pullback.

Key Notes

NZD/USD: On the back foot around multi-year low with eyes on New Zealand retail sales

NZD/USD technical analysis: Struggles near multi-year lows, well below 0.6400 handle

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 of 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).