NZ Trade Data Beats Estimates On Heels of RBNZ Rate Decision
THE TAKEAWAY: New Zealand trade data comes in higher than expected, led by increased exports > Growth in trade surplus should increase NZD value > NZD Outlook: Bullish
New Zealand’s trade balance surplus in March surpassed expectations, coming in at NZ$718 million versus estimates of NZ$470 million and February’s balance of NZ$441 million. The surplus was led by an increase in exports from NZ$3.91 billion in February to NZ$4.42 billion in March, with Japan and China increasing their NZ imports substantially. Meanwhile, imports also came in below expectations at NZ$3.70 billion versus estimates of NZ$3.82 billion. The Kiwi rose against the dollar immediately following the data release.
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New Zealand’s positive trade report comes on the heels of yesterday’s decision by the Reserve Bank of New Zealand to maintain the cash rate at 2.5%. While RBNZ officials admitted to concerns of rising home prices and an appreciating Kiwi, they expect to maintain a 2.5% rate for the remainder of the year. Today’s strong trade data report should certainly help in bolstering their decision to not decrease rates, as for the time being it appears that the rise in the Kiwi’s value has yet to impact exports negatively. This fact along with the positive economic implications of an increasing trade surplus should only push the currency’s value higher moving forward
(NZD/USD 2 Hour Chart)
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