Disappointing US retail sales and consumer sentiment weigh on the USD, lifting NZD/USD as RBNZ tightening expectations persist.
NZD/USD climbed 0.75% to 0.5895 on Friday, driven by a weaker US Dollar after softer-than-expected US economic data. The pair’s rally slowed near the 0.5900 level, a key psychological barrier.
US Retail Sales contracted 0.6% month-over-month in July, missing forecasts for a 0.1% gain and reversing June’s 0.2% rise. Annual sales grew 5%, while the University of Michigan Consumer Sentiment Index fell to 51 in August from 55.2 in July, below expectations.
The data reinforced concerns about US economic momentum, though rising one-year inflation expectations to 4.3% may limit Federal Reserve easing. Meanwhile, RBNZ rate hike expectations continue to support the NZD.