NZD/USD rises above 0.5750 as China’s January-February retail sales rise year-on-year

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NZD/USD maintained its upward momentum for the second day in the Asian session on Monday, trading around 0.5760. The pair strengthened after the release of Chinese economic data, with retail sales rising 4.0% year-on-year in January-February, accelerating from a 3.7% increase in December.

In addition, industrial production increased by 5.9% year-on-year, exceeding the expectation of 5.3%, but slightly lower than the previous value of 6.2%. Positive economic indicators from China tend to support the New Zealand dollar as China is an important trading partner of New Zealand.

After China released its high-impact February activity data, the National Bureau of Statistics (NBS) shared its economic outlook at a press conference on Monday. The NBS noted the resilience of the economy while highlighting the increase in external challenges and the complexity of the global environment.

In addition, China launched a special action plan over the weekend to stimulate consumption, which also provided support for the New Zealand dollar (NZD). The plan includes wage increases, measures to boost household consumption and efforts to stabilize the stock and property markets, improving overall sentiment in the region.

On the domestic front, New Zealand Business’s Performance of Services Index (PSI) fell to 49.1 in February, down from 50.4 in January, indicating a return to contraction in the services sector.

NZD/USD also gained as the US dollar (USD) weakened ahead of the release of US retail sales data during the North American session. The preliminary consumer confidence index for March reported by the University of Michigan (UoM) on Friday fell to 57.9, the lowest level since November 2022, a sharp drop from the previous 64.7. The data was also lower than the market consensus expectation of 63.1, putting pressure on the US dollar.

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