NZ Retail Sales; Exploring Kiwi's Reaction

Retail sales in New Zealand rose 0.9 percent in June when analysts expected no change. However it is still showing a 1.5 percent decline on quarterly basis which is the first "back-to-back drop in a decade" and "the most in 13 years".

Recent data already showed that the economy contracted 0.3 percent in the first quarter, and another 0.5 percent decline is expected for the second quarter.

The data looks disappointing but the NZ dollar might have other reasons for its relatively positive reaction. I see it mostly in response to the decline in oil prices which continued from the last night through the Asian and European sessions and improved sentiment in equity markets. In addition, the University of Michigan Consumer Sentiment was expected to show improvement which could have worked in favor of high-yielding currencies as well as the Kiwi.