NZ Dollar Holds Above Key Support After Mixed Credit Card Data
- New Zealanders upped their credit card spending in July
- However, their currency didn’t benefit much from the news
- It had already shown signs of topping out, however, after a Monday morning of gains
The New Zealand Dollar had been showing signs of topping out against its generally weaker US cousin on Monday and news that kiwis were still hitting the shops with their plastic in July didn’t perk it up much.
Official data showed that New Zealanders spent 0.9% more on their credit cards than they had in June, for an annualized gain of 7.2%. This compares with respective gains of 0.2% and 8.3%% in July. NZ-watchers already knew that the consumer headed into the year’s third quarter in robust form. Data for the second were released just last week and showed strength not seen since early 2016.
Still, local interest rates remain at record lows, and rate futures markets don’t price in any increase as a better than even chance until the end of next year, leaving the “USD” side of NZD/USD to make a lot of the near-term running.
NZD/USD had been climbing for much of the Asia Pacific morning – as investors fretted anew about the Trump administration’s legislative prospects – but was showing signs of exhaustion before the data.
The weaker pace of annualized credit card spending may have underscored that exhaustion but any such extrapolation warrants a bit of care.
The broader technical picture for NZD/USD is better emphasized by its daily chart, below. The kiwi dollar remains in clear retreat from the year’s highs which were struck at the end of July. However, it has not fallen very far to date and support at July 11’s lows of 0.7220 or so remains a strong bulwark against the bears.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX