NZD/USD remains capped under the 0.6200 mark ahead of Chinese House Price Index data
- NZD/USD attracts some sellers near 0.6194 despite the decline of USD.
- New Zealand Retail Sales arrived at -1.9% QoQ in Q4 vs. -0.8% prior.
- The US Manufacturing PMI showed the highest reading in 16 months; Initial Jobless Claims came in stronger than expected.
The NZD/USD pair snaps the seven-day winning streak below the 0.6200 mark during the early Asian session on Friday. The downtick of the pair is supported by the decline in New Zealand Retail Sales for the fourth quarter (Q4) despite the correction of Greenback. The pair currently trades around 0.6194, down 0.09% on the day.
The latest data from Statistics New Zealand on Friday showed that the nation’s Retail Sales fell 1.9% QoQ in Q4 from the previous reading of a 0.8% decline, an eighth consecutive month of declining retail volumes. Meanwhile, the Retail Sales ex Autos for Q4 came in at -1.7% QoQ versus 0.4% prior.
The Reserve Bank of New Zealand (RBNZ) will announce its interest rate decision next week, with no change in rate expected. Investors will take more cues from the RBNZ tone. If they maintain a hawkish bias, this could provide some support to the New Zealand Dollar (NZD) and act as a tailwind for the NZD/USD pair.
On the other hand, the US S&P Composite Purchasing Managers Index (PMI) for February eased to 51.4 from 52.0 in the previous reading. The Manufacturing PMI rose to 51.5 in February from 50.7 in January, better than the market expectation of 50.5. This figure registered the highest reading in 16 months. Finally, the Services PMI eased to 51.3 in February from 52.5 in January, below the market consensus.
Additionally, the US Initial Jobless Claims came in stronger than expected. The report indicated that the US labor market remains robust, and this could lend some support to the Fed’s tighter-for-longer narrative.
Looking ahead, the Chinese House Price Index is due on Friday. The Federal Reserve’s (Fed) Christopher J. Waller is set to speak later in the day. Next week. the attention will shift to the RBNZ interest rate decision.