- New Zealand’s Trade Balance climbs to NZ$285M vs expected NZ$250M in May
- Exports climb to NZ$4.60B; Imports soar to NZ$4.32B
- The New Zealand Dollar extended a rally to 3yr highs against the dollar after the release
The New Zealand Dollar rallied to 3-year highs against the US Dollar after data showed a stronger-than-expected trade balance for May. Statistics New Zealand reported a trade surplus of NZ$ 285M while forecasts had called for $NZ250M. The annual surplus of NZ$1.37b is the largest since 2010. Stronger-than-expected exports which came in at $NZ 4.60B for May contributed to the trade surplus. Of note was the robust annual growth in exports to China which had risen 53 percent, as well as the 36 percent increase in annual dairy exports.
For the Kiwi traders, this data only adds another fundamental chip to the bet that the RBNZ will extend its policy of rate hikes when it next meets on July 23. The central bank has increased its benchmark lending rate at three consecutive meetings – most recently at the June 12 meeting – to its current 3.25 percent. This is the only ‘major’ that is currently supports a hawkish rate bearing – though speculation is building surrounding the inevitable first hike from the BoE and Fed in the not-to-distant future.
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NZDUSD (15min chart) – 6/26/2014 | Created with FXCM Marketscope