The New Zealand dollar traded around $0.597 on Monday, hovering near a three-month high, buoyed by broad-based weakness in the US dollar. The greenback remained under pressure after the US Treasury announced last week that it would step up purchases of longer-dated government bonds. Investors also awaited further details on what Washington has described as its toughest-ever sanctions campaign against Iran. Tehran brushed off the prospect of tougher measures over the weekend, keeping geopolitical tensions elevated.
Domestically, New Zealand retail sales declined 0.5% in the June quarter, disappointing expectations for a 0.1% increase and reversing a 1% gain in the previous quarter. The data highlight softening consumer demand and deepen concerns about the strength of the country’s economic recovery. Even so, the Reserve Bank of New Zealand is still widely expected to raise interest rates again in September, with inflation remaining stubbornly high.
