New Zealand Dollar: Retail slump yet hikes priced – BBH
Brown Brothers Harriman’s (BBH) Elias Haddad highlights that New Zealand retail sales volumes unexpectedly fell in Q2, driven by fuel and motor-related categories, while core sales still rose, showing resilient domestic demand.
New Zealand's retail sales fell unexpectedly in Q2, with fuel and motor-related categories leading the decline. Core sales, however, remained strong, indicating durable domestic demand. The Reserve Bank of New Zealand (RBNZ) is expected to raise interest rates by 25 basis points to 2.75% on September 2, with a total of 75 basis points tightening over the next year.
While markets have priced in these hikes, upside potential for NZD/USD is limited as the currency has already surpassed rate differentials. Gold (XAU/USD) continues its upward trend, reaching its highest level since May near $4,650, following the US Treasury's announcement of increased liquidity support buyback operations.
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