The New Zealand dollar rallied against the greenback yesterday following the release of unexpectedly positive retail sales data by Statistics New Zealand. There were no other major economic releases yesterday. The NZD/USD pair rallied from a low of 0.7160 to a high of 0.7205 in the past 24 hours.
According to Statistics New Zealand, retail sales increased 2.5% q-o-q in the March 2021 quarter, following a decline of 2.6% in the earlier quarter. Economists had anticipated a 1.8% drop in retail sales for the reported period. In value terms, retail sales increased by N$648 million.
Excluding volatile goods, core retail sales increased 3.2% q-o-q in the first quarter of 2021, following a drop of 2.9% in the December quarter. The consensus estimates called for a decline of 1% in core retail sales.
Ten of the 16 regions recorded a rise in sales values. Likewise, ten of the 15 industries had posted higher sales volumes in March 2021 quarter compared with December 2020 quarter.
Concerning industry, electrical and electronic goods posted a growth of 8.4%. Recreational goods recorded a rise of 16%. Hardware, building, and garden supplies reported an increase of 4.5%. Also, department stores posted a growth of 5.6%.
Fuel posted the sharpest decline of 2.2%. Pharmaceutical and other retail stores followed suit with a drop of 1.4%. Twelve of the 15 industries had posted higher sales values in March 2021, compared with the December 2020 quarter.
The critical movements in industry terms are hardware, building, and garden supplies, which recorded a growth of 5.6% (NZ$144 million), and recreational goods, which posted an increase of 16% (N$109 million).
Likewise, motor vehicle and parts reported sales of 2.5% (N$95 million). Also, electrical and electronic goods saw a rise of 6.6% (N$78 million).
On the contrary, clothing, footwear, and personal accessory retailing had the steepest decline, down 0.4% (N$4.60 million), followed by a 0.9% (N$4 million) drop in specialized food retailing.
On a y-o-y basis, sales increased 6.8% in March 2021, expediting from 4.8% in the earlier quarter.
Furthermore, in the year to March 2021, motor vehicles and parts posted a growth of 24% (N$740 million), while hardware, building, and garden supplies recorded a growth of 19% (N$407 million). Electrical and electronic goods reported a growth of 26% (N$239 million).
On the other hand, fuel retailing posted a drop of 6.1% (N$137 million), and accommodation declined 10% (N$128 million) in March 2021, compared with a similar period last year.
The unexpected positive economic data is anticipated to keep the Kiwi dollar uptrend against the greenback in the short term.
The historical price chart indicates that the NZD/USD pair is ascending after testing the support at 0.7160. The following minor resistance is anticipated only near 0.7240. Additionally, the currency pair is trading above its 50-day moving average, while the stochastics indicator is rising towards the bullish zone. Therefore, we are anticipating the currency pair to rally further in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
