NZD/USD Surges Above 0.5750 Amid January – February China Retail Sales Uptick

On Monday, the NZD/USD currency pair experienced an upward surge, climbing above the 0.5750 mark. This positive movement came hot on the heels of the release of crucial economic data from China. The data revealed that China’s Retail Sales had grown by 4.0% year – on – year in January – February. This represented an improvement from the 3.7% rise recorded in December. Such growth in retail sales is a significant indicator of China’s consumer spending power, and it had a direct impact on the NZD/USD exchange rate.

Industrial Production Adds to Positive China Outlook

Alongside the retail sales data, China’s industrial production figures also provided a boost to the NZD. Industrial production expanded by 5.9% year – on – year. Although it slightly fell short of the previous 6.2% reading, it exceeded the forecast of 5.3%. Given China’s position as New Zealand’s key trading partner, these positive economic indicators from China served to underpin the New Zealand Dollar.

NBS Outlook and Consumption – Boosting Plan

After the release of China’s high – impact February activity data, the National Bureau of Statistics (NBS) held a press conference on Monday to share its economic outlook. While acknowledging the resilience of the Chinese economy, the NBS also pointed out the increasing external challenges and a more complex global environment.

Over the weekend, China introduced a special action plan aimed at stimulating consumption. This plan included measures such as wage increases, initiatives to boost household spending, and efforts to stabilize stock and real estate markets. These steps contributed to an improvement in overall market sentiment in the region, further supporting the New Zealand Dollar.

Domestic New Zealand Services Sector Contraction

However, on the domestic front in New Zealand, there was a less – than – encouraging development. The Business NZ Performance of Services Index (PSI) declined to 49.1 in February from 50.4 in January. A reading below 50 indicates a contraction in the services sector, suggesting potential headwinds for the New Zealand economy.

Weakening US Dollar Contributes to NZD/USD Rise

The NZD/USD pair’s upward movement was also aided by a weakening US Dollar. Ahead of the upcoming US Retail Sales data release in the North American session, the US Dollar faced pressure. This came after the University of Michigan (UoM) reported a drop in its preliminary Consumer Sentiment Index for March on Friday. The index fell to 57.9, its lowest level since November 2022, down from 64.7 previously and missing the consensus estimate of 63.1.

Understanding Retail Sales Data

The Retail Sales data, released monthly by the National Bureau of Statistics of China, is a key metric for gauging the value of goods sold by retailers in the country. Changes in Retail Sales are closely watched as an important barometer of consumer spending. The year – on – year (YoY) reading compares sales values in the reference month with the same month a year earlier. Generally, a higher reading is considered positive for the Renminbi (CNY), while a lower reading is seen as negative. In the latest release on March 17, 2025, the actual Retail Sales YoY figure was 4%, in line with the consensus estimate, and up from the previous 3.7%.