The NZD / USD price moved sideways on Tuesday morning as the market reflected on the latest New Zealand retail sales figures. The pair is trading at 0.7160, where it was over the past few weeks. It is a few points below the September high of 0.7217.
Retail sales in New Zealand
New Zealand’s economy has experienced an impressive recovery, aided by its handling of the pandemic. The recent growth of the country’s economy has been driven by the service sector.
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Data released Tuesday morning showed that New Zealand retail sales rebounded in October as the country emerged from the recent shutdown.
Specifically, the data showed that electronic sales rose from 1.0% in September to 10.1% in October. Year over year, those sales were down 7.6%, which was also better than the previous decline of 14.9%.
Retail sales were driven by purchases in restaurants and department stores. Groceries and groceries were also in great demand.
These sales are important measures of the country’s recovery as most of the people are employed in the sector. Moreover, these sales are good measures of consumer spending.
New Zealand’s other economic figures have been relatively strong. For example, the country’s unemployment rate has fallen sharply while house prices have skyrocketed. Likewise, activity in the service sector performed well.
The NZD / USD pair has performed relatively well in recent weeks due to the hawkish RBNZ. The bank was among the first to end quantitative easing. He was also among the first to start raising rates. Therefore, analysts expect the bank to maintain this position at the next meeting.
The next key catalyst for the NZD / USD will be the upcoming US consumer inflation data. The figures should show that inflation climbed to almost 6% in October.
NZD / USD Forecast
The NZD / USD pair is trading at 0.7160, where it was in the last few sessions. On the four-hour chart, the pair is slightly above the 25- and 50-period Exponential Moving Averages (EMAs). It also broke above the important support at 0.7132, where it struggled to break below in October.
The pair also broke the 23.6% Fibonacci retracement level. Therefore, it is likely that it will continue to rise as the bulls target the key resistance level at 0.7200.
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