Forex News: Kiwi Little Changed Despite Lower Total N.Z Card Spending
The Takeaway: N.Z. Total and Retail Card Spending declined in March-> Traders look for China Trade Balance for more guidance -> NZD/USD was little changed
On month, total spending by debit and credit cards in New Zealand decreased by1.2 percent in March, versus 0.9percent in February (revised from 0.8%). Meanwhile, retail card spending came in well below expectation set for 0.3 percent, dipping 0.5 percent in March versus 0.7 percent in February (revised from 0.8 percent). The unexpected decline in retail card spending marked an end to the three consecutive month increase and slipped back into negative territory.
The slower growth in total and retail card spending counters to the positive sentiment set by the recent upbeat New Zealand data such as the 4Q GDP growth and QV house prices. It suggests that the boost from the Canterbury rebuild may be running out of upward momentum. The Reserve Bank of New Zealand (RBNZ) is likely to hold its 2.5 percent interest rate steady until next year. In the case that domestic consumption continues to weaken, it may reduce bets that the RBNZ will cut interest rate next year to curb the strength of the New Zealand dollar.
Even though retail card spending came in well below expectation, it did little to dampen the strength of the NZD/USD, which reached US85.357 cents in late US trading, the highest since Sep 2011. More importantly, FX traders will pay attention to the China trade balance that is scheduled to release on April 10th, which may serve as a major catalyst to the currency pair. At the time of writing, the NZD/USD is trading at US85.221 cents.
NZD/USD 1 Minute Chart
Chart Created by Robin Leung using Marketscope 2.0
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