New Zealand Dollar Gains Despite Weaker Exports, Imports Data

By David Liu,

The Takeaway : NZ February trade data shows weaker exports, previous data revised lower > additional pressures on export-oriented economy > NZDUSD gains in low liquidity

The New Zealand dollar moderately strengthened after February trade data showed weaker exports and imports, including lower revisions for the previous month’s data. Major reactions in Kiwi crosses were subdued with slightly better trade balance and low-liquidity trading in pre-Asia markets. Further pressures on the substantial export sectors of the New Zealand economy is expected, with exports to China showing a substantial decline.

EVENT

ACT

EXP

PREV

Trade Balance (FEB)

161M

153M

-159M

Exports (FEB)

3.59B

3.93B

3.73B

Imports (FEB)

3.43B

3.65B

3.89B

Trade Balance 12mo YTD (FEB)

621M

712M

644M

Total Exports to Australia (FEB)

750.2M

-

726.0M

Total Exports to China (FEB)

526.3M

-

626.6M

A breakdown of New Zealand trade to major destinations showed a large impact of further Chinese economic fine tuning, with total exports falling to a three month low. Although breakdown by merchandise is not available yet, reports earlier in the month from dairy producer Fonterra indicated that exports of dairy and other soft commodities to China may slow. Trade between New Zealand and its largest partner Australia gained on a comparatively more optimistic domestic Australian economy.

- Data Bloomberg

The New Zealand dollar gained moderately versus the US dollar immediately after the report despite weaker data in all reports except monthly trade balance. With no more data scheduled during the Asian session and the effects of the trade data largely market-neutral, the New Zealand dollar is expected to follow general risk trends for the rest of the morning.

Chart generated with FXCM Strategy Trader

-- By David Liu, DailyFX Research
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/03/25/New_Zealand_Dollar_Gains_Despite_Weaker_Exports.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.