The NZD/USD price moved sideways on Tuesday morning as the market reflected on the latest New Zealand retail sales numbers. The pair is trading at 0.7160, where it has been in the past few weeks. It is a few points below the September high of 0.7217.
New Zealand retail sales
New Zealand’s economy has staged an impressive recovery, helped by its handling of the pandemic. The recent growth of the country’s economy has been driven by the services sector.
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Data published on Tuesday morning showed that New Zealand’s retail sales bounced back in October as the country emerged from the recent shutdown.
Precisely, the data showed that electronic sales rose from 1.0% in September to 10.1% in October. On a year-on-year basis, these sales declined by 7.6%, which was also better than the previous drop of 14.9%.
Retail sales were driven by shopping in restaurants and department stores. Grocery and food items were also in high demand.
These sales are important measures of the country’s recovery because most people are employed in the sector. Also, these sales are good measures of consumer spending.
Other economic numbers from New Zealand have been relatively strong. For example, the country’s unemployment rate has dropped sharply while home prices have rocketed higher. Similarly, activity in the services sector has done well.
The NZD/USD pair has done relatively well in the past few weeks because of the hawkish RBNZ. The bank was among the first ones to end quantitative easing. It was also among the first ones to start hiking rates. Therefore, analysts expect that the bank will maintain this stance in the upcoming meeting.
The next key catalyst for the NZD/USD will be the upcoming US consumer inflation data. The numbers are expected to show that inflation soared to almost 6% in October.
The NZD/USD pair is trading at 0.7160, where it has been in the past few sessions. On the four-hour chart, the pair is slightly above the 25-period and 50-period exponential moving averages (EMA). It has also moved above the important support at 0.7132, where it struggled to move below in October.
The pair has also moved above the 23.6% Fibonacci retracement level. Therefore, there is a likelihood that it will keep rising as bulls target the key resistance level at 0.7200.
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