The euro fell against the Kiwi dollar yesterday following reports of an unexpected decline in the producer price index for October. Notably, credit card spending in New Zealand hit its highest level in the same period. There were no other major economic releases. Overall, the EUR/NZD pair rallied from a low of 1.6726 to a high of 1.6802 in the past 24 hours.
According to the data published by the Reserve Bank of New Zealand, the country’s credit card spending rose by 24.80% y-o-y in October, following a rise of 34% in the prior month.
On an m-o-m basis, total billings grew by 1% in October to N$4.50 billion. The reported figure represents the highest value on record.
Notably, domestic billings on New Zealand-issued cards were N$ 4 billion in October, almost unchanged from the prior month. Total advances outstanding were N$6.10 billion in October. On a y-o-y basis, advances rose by 6% (from N$5.80 billion) in October. Total credit limits also remained unchanged from September at N$21.30. Compared with October 2021, total credit limits were 2.70% lower in October 2022 and the lowest since April 2015.
According to Destatis, the German producer price index fell by 4.20% m-o-m in October, following an increase of 2.30% in the prior month, and disappointed economists who were expecting a slight growth of 0.90%. The reported figure reflects the first month-over-month decline since May 2020.
On a y-o-y basis, German producer prices surged 34.50% in October 2022. The increase was primarily due to an 85.60% y-o-y jump in energy prices, compared with 2021. On a m-o-m basis, energy prices declined by 10.40% in October, primarily due to a drop in prices for electricity and natural gas.
Electricity costs skyrocketed 90.30% y-o-y in October 2022. However, on an m-o-m basis, electricity costs decreased by 16.90% in October. Natural gas prices rose by 125.60% in October 2022. Similar to electricity charges, natural gas costs dropped by 9% m-o-m in October.
In October 2022, petroleum products recorded an increase of 34.60% on a y-o-y basis. On a m-o-m basis, the price of petroleum products inched up by 2.60%. Excluding energy, producer prices increased 13.70% y-o-y in October 2022.
Consumer goods prices posted a rise of 19% in October 2022, compared with last year. Likewise, compared with September 2022, consumer goods prices inched up 1.10% in October 2022. Intermediate goods reported an increase of 15.90% and 0.10%, compared with October 2021 and September 2022, respectively. The y-o-y increase in prices was led by a 15.70% surge in the prices of metals.
Basic chemicals, fertilizers, and nitrogen compounds posted an increase of 32% y-o-y in October 2022.
Also, the prices of pellets and briquettes jumped 151% y-o-y in October 2022. Notably, newsprint prices grew by 95.70%. While grain flour recorded an increase of 40.70%, feed for farm animals grew by 33.40%. The price of durable goods stood 11.30% higher in October 2022, compared with the previous year. The increase was led by a 13.40% rise in furniture prices.
Capital goods increased 7.80%y-o-y in October. The steepest rise was recorded by machinery at 9.50%. Similarly, motor vehicles and parts posted an increase of 5.60%.
The weak German PPI data is expected to keep the EUR/NZD pair range-bound with a slight bearish bias in the days ahead.
The historical price chart indicates that the EUR/NZD pair is declining after failing to stay above the major support level of 1.6965. The next major support is seen only near 1.6510. Additionally, the stochastic oscillator is in the bearish zone. Therefore, we anticipate the currency pair to remain in a downtrend in the near term.
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.
