New Zealand Dollar Falls Further On Lower Credit Card Spending, Sentiment

THE TAKEAWAY: Drop in credit card spending, possibly lower retail sales > slower inflation, less need for RBNZ rate hikes > NZD declines

A lower than expected credit card spending data for July, indicating a possible weakening of retail sales and less pressure for the RBNZ to continue its rate increases, added to overall risk-off trading following the 6th largest drop in the S&P500 and dropped the New Zealand Dollar. At the time of writing, the New Zealand dollar and the Australian dollar were the top two losers against the buck, shedding 0.390% at 0.281% respectively as investors continued to look for safety.

NZ Credit Card Sales MoM Total. Chart generated with Bloomberg LP Professional Terminal.

The New Zealand dollar continued to face downward pressure in pre-Asia trading following a 5.55% in the Dow Jones the previous session and a similar 6.66% drop in the benchmark S&P500 index. Continued risk-off sentiment showed in US equity futures, as the DJIA was off 0.401% and the S&P500 was off a similar 0.405%. However, New Zealand dollar traders will be awaiting Chinese data to be released at 0130GMT and 0200GMT today, including PPI, CPI and industrial production.

NZDUSD 5 minute chart; vertical line indicates time of release. Chart generated with FXCM Strategy Trader.