Kiwi Weakens As N.Z. Card Spending Unexpectedly Falls In February

By Tzu-Wen Chen,

THETAKEAWAY : [ N.Z.Card Spending Declined Unexpected in February] > [Weakeningretail sales; reduced pressure for RBNZ rate hike in nearterm] > [NZD weakensagainst USD]

Total card spending in New Zealand unexpectedly declined in February, dipping by 0.3 percent from a month earlier. This is significantly lower than the month-over-month rise of 0.5 percent reading in February 2011. Total spending had risen by 0.9 percent in January (revised from 1.0 percent) after falling in November and December. Meanwhile, retail card spending also fell short of expectations in February, declining by 0.7 percent after recording a 1.1 percent rise in January (revised from 1.2 percent). Economists polled in a Bloomberg News survey had expected a 0.1% rise in both total and retail card spending in February.

The lower-than-expected figures indicate a possible weakening of retail sales, and could alleviate pressure on the Reserve Bank of New Zealand to raise its overnight cash rate in the near term. The latest figures support the RBNZ’s decision yesterday to hold their benchmark cash rate unchanged at 2.5 percent.

NZDUSD1-minute Chart: March 8, 2012

Chart createdusing Strategy Trader – Prepared byTzu-Wen Chen

Immediately after the data release, the kiwi slid against the U.S. dollar, declining by 7 pips in the first 15 minutes. The N.Z. dollar declined as investors reacted to the weaker figures, which could contribute to the RBNZ deciding against a rate hike in the near term. At the time of this report the NZD had retraced slightly but was trading lower at 0.8241 against the USD.

--- Written by Tzu-Wen Chen DailyFX Research
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/03/08/Kiwi_Weakens_as_N.Z._Card_Spending_Unexpectedly_Falls_in_February.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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