- NZD/USD strengthens after the release of key economic data from China on Monday.
- China’s Retail Sales grew 4.0% YoY in January-February, improving from December’s 3.7% rise.
- The US Dollar remains under pressure as the Michigan Consumer Sentiment Index declined in March.
NZD/USD continues its upward momentum for the second consecutive day, trading around 0.5760 during Asian hours on Monday. The pair strengthens following the release of China’s economic data, with Retail Sales increasing by 4.0% year-over-year in January-February, up from December’s 3.7% growth.
Additionally, industrial production expanded by 5.9% YoY, surpassing the 5.3% forecast but slightly below the previous 6.2% reading. Positive economic indicators from China tend to support the NZD, given China’s role as a key trading partner for New Zealand.
After the release of China’s high-impact February activity data, the National Bureau of Statistics (NBS) shared its economic outlook during a press conference on Monday. While noting the economy’s resilience, the NBS highlighted increasing external challenges and a more complex global environment.
Furthermore, the New Zealand Dollar (NZD) gained support after China introduced a special action plan over the weekend to stimulate consumption. The initiative includes wage increases, measures to boost household spending, and efforts to stabilize stock and real estate markets, improving overall market sentiment in the region.
On the domestic front, New Zealand’s Business NZ Performance of Services Index (PSI) declined to 49.1 in February from 50.4 in January, indicating a return to contraction in the services sector.
The NZD/USD pair also advanced as the US Dollar (USD) weakened ahead of the upcoming US Retail Sales data release in the North American session. The Greenback faced pressure after the University of Michigan (UoM) reported a drop in its preliminary Consumer Sentiment Index for March on Friday, falling to 57.9—its lowest level since November 2022—from 64.7 previously. This figure also missed the consensus estimate of 63.1.
Economic Indicator
Retail Sales (YoY)
The Retail Sales data, released by the National Bureau of Statistics of China on a monthly basis, measures the value of goods sold by retailers in China. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales values in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Renminbi (CNY), while a low reading is seen as bearish.
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