The New Zealand Dollar edged lower against major counterparts on Tuesday after Statistics New Zealand reported a 0.8% quarter-on-quarter fall in seasonally adjusted retail sales volumes in the fourth quarter of 2025. The decline was deeper than the 0.3% contraction economists expected and marked a third consecutive quarterly decrease. The NZD, which had been near a two-month high against the US Dollar, fell 0.4% to $0.6125 by mid-session London time. Core retail spending, excluding fuel and vehicle sales, dropped 0.6%, indicating broad weakness as households prioritised essentials amid cost-of-living pressures. ASB Bank economists said the figures increased the likelihood of further easing by the Reserve Bank of New Zealand (RBNZ, New Zealand's central bank). The RBNZ has cut its official cash rate by 125 basis points since August 2025 to 3.25%, while markets are pricing a 70% chance of a further 25-basis-point reduction at the March policy meeting, which would take the rate to 3.00%. The NZD's decline was limited because investors had largely anticipated weak data, while improved risk sentiment and a softer US Dollar provided support. NZD/USD is testing support at 0.6100; a break below could expose 0.6050, while resistance is at 0.6180. The next RBNZ decision, along with employment and inflation data, will be important for the currency's medium-term direction. A weaker NZD may help exporters but increase import costs and add to inflation pressures, leaving the RBNZ balancing economic support against renewed price pressures.