RTTN:NZ Dollar Trims Gains Despite Higher Retail Sales
(RTTNews) - The New Zealand dollar erased its early Asian session gains against other major currencies in late trading Monday, even after a report showed that the nation's retail sales rose to its highest level since 2006, as domestic equities fell on a rate cut by S&P.
New Zealand's NZX 50 Index declined 12.15 points, or 0.37 percent to 3309.36 as Standard & Poor's cut Telecom's long-term credit rating by one notch to A- to reflect the demerger of the company's Chorus business and the loss of its network revenues.
Earlier on October 25, shareholders of Telecom Corp. of New Zealand approved the split of New Zealand's biggest phone company, allowing network unit Chorus to partner the government in the ultra-fast broadband program.
Retail sales in New Zealand increased at the fastest pace in nearly five years in the September quarter, boosted by visitor spending during the Rugby World Cup, figures from Statistics New Zealand showed today.
Sales volume, after adjusting for seasonal variations, rose 2.2 percent quarter-on-quarter, the fastest pace since the December quarter of 2006. This followed a revised 1 percent growth in the June quarter. Economists had forecast a meager 0.6 percent increase.
Meanwhile, New Zealand's October service sector expanded at the slowest pace since July last year, survey results from Business NZ showed today.
The seasonally adjusted Bank of New Zealand-Business NZ performance of service index fell to 50.6, the lowest level since July 2010, from 52.9 in September. An index reading above 50, however, signals expansion of the sector.
The New Zealand dollar slipped to 1.7510 against the euro, shedding almost 100-pips from its 4-day high of 1.7416 hit at the beginning of the session. Technically, an ascending triangle is formed in the 4-hour chart of the EUR/NZD pair and the domestic unit is targeting support around the 1.7580 area. The pair is presently worth near Friday's closing value of 1.7511.
The euro gained on encouraging developments in Europe after new leadership formed in Italy and Greece. Mario Monti became Italy's new prime minister and the former European Central Bank Vice President Lucas Papademos was sworn in as the new prime minister in Greece.
The New Zealand dollar that advanced to a 5-day high of 61.15 against the Japanese yen at the beginning of the Asian session reversed its course shortly and reached as low as 60.59 around 1:15 am ET. The kiwi-yen pair is presently worth 60.62 with 60.15 seen as the next likely downside target level, at which the 23.6 percent of the retracement level between July high and October low stands.
(RTTNews) - Japan's gross domestic product was up an annualized 1.5 percent in the third quarter of 2011 compared to the previous three months, the Cabinet Office said today in a preliminary report - ending the country's recession following the devastating 9.0 magnitude earthquake and tsunami on March 11.
The headline figure matched analyst expectations following the 0.5 percent contraction in the second quarter. On a yearly basis, GDP jumped 6.0 percent - edging forecasts for an increase of 5.9 percent after declining 2.1 percent in the second quarter.
At the same time, Industrial production in Japan declined less than initially estimated in September, final results from the Ministry of Economy, Trade and Industry showed today.
Production fell a seasonally adjusted 3.3 percent month-on-month in September, less than the 4 percent fall reported earlier. This marked the first decline in production in six months.
On an annual basis, industrial production was down 3.3 percent, revised from the 4 percent fall estimated in the preliminary report.
Having dropped from early Asian session's 5-day high of 0.7920 against the US dollar, the New Zealand currency reached a low of 0.7854 around 1:15 am ET. On the downside, the kiwi may find support at its 23.6 percent of the retracement level of 0.7810 between its July-October highs and lows. The pair is presently worth near Friday's closing quote of 0.7860.
The New Zealand dollar that opened higher at 1.3044 against the Australian dollar in the Asian trading eased to 1.3093 around 1:25 am ET. The aussie-kiwi pair is presently quoted at 1.3087, just a few pips short of Friday's close.
Looking ahead, French current account and eurozone industrial production-both for September and Swiss producer and import price data for October are expected in the upcoming European session.
There are no major economic data due out in the North American session.
