New Zealand Dollar Slips As Stronger Imports Hit Trade Balance
- The New Zealand Dollar fell in early Asian trading
- Its home country’s trade balance missed forecasts by a very long way
- The details weren’t especially worrying, but exports’ rise was unexpected
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The New Zealand Dollar fell Tuesday following news of a much lower-than-expected trade balance.
May’s surplus was NZ$103 million (US$75 million), well under the NZ$403 million predicted and the previous month’s NZ$503 million. A rise in imports of both petroleum products and vehicles caused exports to top forecasts and weigh on the overall balance. By contrast exports were just about as expected at NZ$4.95 billion, with the crucial dairy sector in the vanguard of gainers once again.
The overall trade deficit for the year ending in may widened to NZ$3.8 billion, from NZ$3.6 billion in April.
The New Zealand Dollar shrank against its US cousin on news of the lower balance, but soon steadied.
The ‘kiwi’ got a measure of support last week from its home central bank. The Reserve Bank of New Zealand kept its key official cash rate on hold at record low of 1.75%. This had been widely expected. However the tone of it subsequent statement was taken by the markets as more hawkish on monetary policy than its predeccesor, even if only very marginally so.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.