The Takeaway: New Zealand trade balance posted a trade surplus of 414M in February -> Exports to China rose by 49 percent -> New Zealand dollar extends gain.
New Zealand trade balance posted a trade surplus of 414M in Februaryversus an upwardly revised trade deficit of -287M in January, which came in well above expectation set for -12M.
Exports exceeded imports in February, in which value of exported goods increased by 8.0 percent (MoM) to 3.91B, while imports increased by 2.5 percent (MoM) to 3.49B. The driving force behind the surplus is the strong demand from China, which posted a 49 percent increase in exported goods to the second largest economy, according to statistics New Zealand.
Although the New Zealand dollar is underpinned by theupbeat gross domestic productivity figures, Reserve Bank of New Zealand (RBNZ)’s Governor Graeme Wheeler stated in a press release last week that the overvalued New Zealand dollar is hurting export and import competing companies.
Prior to the release, the New Zealand dollar surged against the euro as unknown losses on Cyprus’s uninsured depositors and terms on bank restructuring dragged the euro lower, which sent the EUR/NZD to 1.53738, the lowest level since Aug 2012. Upon the release, the so-called Kiwi extended gain and the EUR/NZD reached as low as 1.53645. However, the gain of the New Zealand dollar has urged FX traders to take profits, thereby sending the EUR/NZD 28 pips higher from its 7-month low mark.
EUR/NZD 1 Minute Chart
Chart Created by Robin Leung using Marketscope 2.0