The Euro New Zealand Dollar (EUR NZD) exchange rate trended higher overnight on Monday following lacklustre New Zealand retail card spending figures.
New Zealand Dollar (NZD) Tumbles as Retail Card Spending Flatlines
The New Zealand Dollar slumped during the Asian session last night following the release of the countries latest spending data.
According to data released by Statistics New Zealand retail spending on credit cards plummeted from 0.8% to 0.0% in June, with the lack of growth worrying some investors especially in light of the British and Irish Lions rugby tour which was held last month.
Investors had hoped that the increase trade and tourism surrounding the rugby would lead to a notable uptick in spending last month as thousands of rugby fans flocked to the country to enjoy a month long tour.
However according to the report it appears that that continued downtrend in oil markets and subsequent lower fuel prices managed to offset any boost provided by the influx of rugby fans.
Statistics New Zealand business indicators manager Sue Chapman said;
‘Retail spending in the June month was flat because the high hospitality spending was offset by the low fuel prices. The increased spending on hospitality could be largely a result of the influx of British and Irish Lions fans.’
Key areas which were expected to show bumper growth thanks to increased demand amongst rugby fans such as apparel and consumables also came in softer than expected, weighing on the overall spending report.
With the Reserve Bank of New Zealand (RBNZ) playing close attention to consumer spending as it targets a 2-3% range for inflation, today’s disappointing data will do little to support the Bank’s hope that underlying inflation will have strengthened in the second quarter and likely diminishing the possibility of a rate hike before 2019.
Euro (EUR) Strengthened by Uptick in Italian Industrial Output
Meanwhile the Euro was bolstered this morning by the release of Italy’s latest industrial production figures.
According to Italy’s national statistics bureau ISTAT, industrial output surged to 0.7% in May, making a dramatic recovery after previously contracting by -0.5% and reaching its best levels since February.
This also led production to beat expectations of 0.5% growth and bodes well for the possibility of a strong second quarter GDP reading.
Italy’s economy has been showing impressive growth in recent months, and has led some analysts to upwardly revise their forecasts for its performance this year, with the IMF just last month revising its predictions for 0.8% growth up to 1.3% for 2017.
EUR NZD Forecast: ECB’s Coeure Speech to Downplay Rate Hike Speculation
Looking ahead the EUR NZD exchange rate
Meanwhile the New Zealand Dollar may stumble further on Thursday with the release of its domestic Manufacturing PMI, with some analysts predicting it will have slipped from a one-year high of 58.5 last month.
Current Interbank Exchange Rates
At the time of writing the EUR NZD exchange rate was trending around 1.5792 and the NZD EUR exchange rate was trending around 0.6331.
