Kiwi Weakens as N.Z. Card Spending Unexpectedly Falls in February
Total card spending in New Zealand unexpectedly declined in February, dipping by 0.3 percent from a month earlier. This is significantly lower than the month-over-month rise of 0.5 percent reading in February 2011. Total spending had risen by 0.9 percent in January (revised from 1.0 percent) after falling in November and December. Meanwhile, retail card spending also fell short of expectations in February, declining by 0.7 percent after recording a 1.1 percent rise in January (revised from 1.2 percent). Economists polled in a Bloomberg News survey had expected a 0.1% rise in both total and retail card spending in February.
The lower-than-expected figures indicate a possible weakening of retail sales, and could alleviate pressure on the Reserve Bank of New Zealand to raise its overnight cash rate in the near term. The latest figures support the RBNZ’s decision yesterday to hold their benchmark cash rate unchanged at 2.5 percent.
NZDUSD 1-minute Chart: March 8, 2012
Chart created using Strategy Trader– Prepared by Tzu-Wen Chen
Immediately after the data release, the kiwi slid against the U.S. dollar, declining by 7 pips in the first 15 minutes. The N.Z. dollar declined as investors reacted to the weaker figures, which could contribute to the RBNZ deciding against a rate hike in the near term. At the time of this report the NZD had retraced slightly but was trading lower at 0.8241 against the USD.
--- Written by Tzu-Wen Chen DailyFX Research
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