New Zealand retail sales fell more than expected in July, as a plunge in auto sales led the headline figure down 0.8 percent. Excluding autos, sales were still disappointing at -0.2 percent. The data underpins the Reserve Bank of New Zealand’s sharp 50bp reduction in the official cash rate yesterday to 7.5 percent, especially as RBNZ Governor Alan Bollard said the economy was experiencing a major slowdown that would be “led primarily by the household sector.”
The New Zealand dollar fell versus the US dollar on the news for a test of support at 0.6500, but given the pickup in risk appetite over the past few hours, NZD/USD may be able to recover overnight.