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NZ Dollar Firm amid Positive Market Sentiment, Ignores Historic Drop of Retail Sales Values

August 24, 2020 at 17:37 by Vladimir Vyun

Some coins on NZD notesThe New Zealand dollar traded higher against the vast majority of most-traded currencies today, including other commodity currencies, which themselves were firm thanks to the positive market sentiment. Today’s macroeconomic data released in New Zealand was not very good but that did not prevent the kiwi from rising.

 

Investors were in a positive mood after Financial Times reported that the US government wants to bypass the US regulations to fast-track an experimental UK vaccine to battle the spread of COVID-19. Not everyone in the United States liked the news, claiming that US President Donald Trump wants to rush the process before the US presidential elections in hopes to gain more votes but that can actually hurt his public image. Whether it is the case on not, market participants welcomed the news.

News from New Zealand itself was less positive as the government decided to keep Auckland in lockdown at alert level 3 till Sunday night. Prime Minister Jacinda Ardern argued that such measures will allow Auckland to move to level 2 “and stay down” without switching back and forth between alert levels.

As for macroeconomic data, today’s session was extremely light on reports, with the only notable one being retail sales data released by Statistics New Zealand. The report revealed that sales values in several industries demonstrated the biggest decline since data started being compiled in 1995. Overall, retail sales dropped by 14.6% in the June quarter, adjusted for inflation. While it was a significantly bigger drop than a 1.2% decline registered in the May quarter, the actual figure was still better than the consensus forecast of a 16.3% slump. Retail statistics manager Kathy Hicks commented on the result:

This unprecedented fall in the June quarter was not unexpected, with COVID-19 restrictions significantly limiting retail activity.

NZD/USD rose from 0.6527 to 0.6539 as of 17:36 GMT today, reaching the high of 0.6565 intraday. NZD/JPY gained from 69.02 to 69.25, while its daily high was at 69.39. EUR/NZD was about flat at 1.8039, retreating from the daily maximum of 1.8105.

If you have any questions, comments, or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

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