Talking Points:
- New Zealand’s April trade surplus beat forecasts by a huge margin
- Indeed, it came in at its monthly best since March, 2015
- The New Zealand Dollar rose in the aftermath
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The New Zealand Dollar got a lift Wednesday on news that its home country’s goods trade surplus hammered expectations in April.
It came in a NZ$578 million (US$405.5 million), hugely better than the NZ$267 million expected. It was also well above the NZ$332 million reported for March. Indeed, April’s was the highest monthly surplus since March 2015, and the largest April surplus for six years. The official statistics office said that there were increases in exports of crucial dairy products, along with timber and wine.
Overall goods exports were up nearly 10% on the year with imports up 4%. The New Zealand Dollar clearly rose after these upbeat figures, as can be seen below:
The Reserve Bank of New Zealand has surprised markets with its “dovishness” on interest rate policy this year, despite some strong econiomic data of which this is another example.
Investors will be keen to see if the RBNZ’s view that many factors supporting the local economy will prove transient is as firmly in place after these numbers.
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
