NEW ZEALAND DOLLAR STRENGTHENS AFTER RETAIL SALES ECONOMIC DATA INCREASES 28% IN THIRD YEAR 2020

23.11.2020
Market News
 23rd Nov. - New Zealand's national currency, the NZ Dollar strengthened after retail sales data recorded a sharp increase in the third quarter of 2020. The kiwi currency outperformed some of the world's other major currencies such as the US Dollar, Euro and Pound Sterling. Based on data released by the New Zealand Statistics Bureau, there was a significant increase of 28%, a sharp increase from 14.6% in the second quarter of 2020. The stance taken by the Reserve Bank of New Zealand also gave investors some confidence in the value of the New Zealand Dollar. The RBNZ took the stand not to pursue aggressive monetary policy aggressively after taking into account economic data which was seen to be improving, in contrast to their neighboring country Australia which was seen as more aggressive after announcing a lower interest rate cut of 0.10% at the latest economic meeting by the Reserve Bank of Australia. The RBNZ is one of the central banks that has taken a stand against weak monetary policy to stimulate the economy since the onset of the Covid-19 pandemic crisis in March, hinting at the possibility of taking more aggressive steps towards the Negative Interest Rate Policy (NIRP) and ready to control the extraordinary strengthening of the NZ Dollar. However, this month the RBNZ took steps to stop for a while from continuing to weaken the existing monetary policy, instead taking a wait and see attitude. Some other economic data also show slightly positive changes such as employment data where the amount of unemployment data is not as bad as expected.   
AHMAD FAIZUDDIN BIN RAZALI
CHIEF ANALYST OF CDG GLOBAL