The New Zealand Dollar opens lower this morning as the US Dollar made gains across the board after better than expected retail sales data released overnight. The Kiwi had made gains in local trade yesterday as NZ inflation met market expectations, before falling back on U.S Dollar strength.
U.S Data Beats Expectations
US retail sales exceeded projections in June with broad gains across most categories, increasing by 0.4% on a monthly basis, well ahead of market expectations of a 0.1% increase. The positive data gave the US Dollar a boost despite comments from Fed Chairman Powell who reiterated that the Central Bank is “carefully monitoring” downside risks to US growth, and “will act as appropriate to sustain the expansion”.
NZ Inflation Meets Expectations
NZ CPI data released yesterday was bang on RBNZ and market expectations with annual inflation running at 1.7%. The number is still below the 2% mid-point of the RBNZ’s inflation target, which supports market expectations of a cut to the official cash rate. The big question is whether an expected cut in August will be followed by a further cut in November.
AUD Lower after RBA Meeting Minutes
The Aussie Dollar lost ground yesterday as RBA minutes from its meeting earlier in the month repeated that they are ready to provide further support to the economy if needed, as it continues to “closely monitor” the labour market. The next Australian labour market data is due out tomorrow afternoon, with markets expecting a 5.2% unemployment rate.
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