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Tuesday morning in Asia, the New Zealand dollar plummeted against other major currencies after a government report showed that the nation's retail sales declined in July. The kiwi fell to near a 2-week low against the aussie and a 5-day low against the yen and the euro.
Statistics New Zealand reported today that the retail sales dropped 0.4% in July 2010, compared to June.
Core retail sales, which exclude auto-related transactions, were down 0.1 percent or NZ$3.0 million on month. The overall retail sales decrease amounted to NZ$24.0 million. It followed a 1.0 percent increase in June 2010.
Today's report increased speculation that the Reserve Bank of New Zealand will leave its interest rate unchanged at 3%. The central bank is scheduled to meet on Thursday.
Earlier today, a report from the Real Estate Institute of New Zealand showed that an index measuring home sales in New Zealand was up 0.3 percent in August compared to the previous month, posting a score of 3,201.7. That follows a 1.2 percent decline in July.
On an annual basis, house sales were down 27.1 percent following the 26.7 percent decline in the previous month.
The New Zealand stock market is trading higher today, tracking the overnight positive cues from Wall Street. The benchmark NZX 50 index is currently trading at 3,192.02 - up 13.55 points or 0.4% from its previous close.
The New Zealand dollar weakened against the U.S. currency during early Asian session on Tuesday. As of now, the kiwi-greenback pair is worth 0.7290, down from near a 6-week high of 0.7349 hit late New York Monday. If the kiwi slides further, it may likely target the 0.723 level.
During early Asian session on Tuesday, the New Zealand dollar declined against the Japanese yen. At present, the kiwi-yen pair is trading at a 5-day low of 60.75 with 59.7 seen as the next downside target level.
The New Zealand dollar declined against the Aussie and the euro in early Asian deals on Tuesday. The kiwi touched near a 2-week low of 1.2812 against the aussie at 6:45 pm ET and a 5-day low of 1.7656 against the euro at 6:55 pm ET. Although the kiwi attempted to recover thereafter, it slipped again shortly. Currently, the kiwi is worth 1.2805 against the aussie and 1.7638 against the euro. The next downside target level for the NZ dollar is seen at 1.284 against the aussie and 1.773 against the euro.
Business confidence in Australia surged in August, according to the latest survey reported today by National Australia Bank. The Bank's business confidence index reading for August was 11.0 in August compared to 2.0 in July.
Looking ahead, Japan's final figures of July industrial production is due at 12:30 am ET.
French CPI and German wholesale price index - both for August, Eurozone industrial production for July and the German ZEW economic sentiment index for September are expected to influence trading in the European session.
Across the Atlantic, the U.S. retail sales for August and business inventories for July are slated for release in the New York session.
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