New Zealand Retail Sales Declines, Kiwi Remains Flat

Today’s report about the decline of New Zealand retail sales weakened the nation’s currency, but the New Zealand dollar regained its strength later and currently trades almost flat versus the US dollar and the Japanese yen, and even posted gains against the euro.
Statistics New Zealand reported today that the seasonally adjusted total retail sales value decreased 1.1 percent in December, following the 1.2 percent increase in November. The decrease was driven mainly by the core retailing. The seasonally adjusted volume of total retail sales fell 0.4 percent in the last quarter of 2010 quarter, while the volume of core retailing sales (which excludes the two vehicle-related industries) was flat. The vehicle-related industries and the fuel retailing posted the biggest increases in both volume and value. But these gains were offset by the decline in the motor vehicles and parts retailing sales.
Credit Suisse Group AG said that the speculators’ bets that the Reserve Bank of New Zealand will increase the interest rates dropped from 55 basis points to 52 basis points. The analysts expect that the New Zealand currency may be supported by the strong commodity markets.
NZD/USD rose from 0.7562 to 0.7570 as of 20:56 GMT. EUR/NZD dropped noticeably from 1.7864 to 1.7809. NZD/JPY traded at 63.03, near its opening level of 63.10.

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