- The New Zealand Dollar appreciated against its major peers and bond yields climbed
- Total retail sales growth surpassed estimates and clocked in at highest since Q2 2016
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The New Zealand Dollar enjoyed a boost at the beginning of this week’s session as better than expected retail sales growth increased RBNZ rate hike bets. In the second quarter of 2017, the total volume of store transactions rose 2 percent.
This was the strongest reading since Q2 2016 and it was supported by a record 4.2 percent increase in the food and beverage industry. According to Stats New Zealand, this was largely due to the influx of sporting fans and visitors for the World Masters Games and the Lions rugby tour.
Just last week, the Reserve Bank of New Zealand signaled that their next interest rate move will likely be a hike around the third quarter of 2019. With that forecast being quite some time ahead of us, the markets likely interpreted the data as leading to the RBNZ acting sooner. Indeed, local front-end bond yields climbed.