The euro remained range-bound against the Kiwi dollar yesterday, despite the release of upbeat Eurozone current account data for June. New Zealand’s trade balance data for July unexpectedly missed estimates. The market is expected to favor the euro in the upcoming trading sessions. Overall, the EUR/NZD pair traded in a range of 1.8020 to 1.8137 in the past 24 hours.
According to Statistics New Zealand, the country’s trade balance was a deficit of N$963 million in July following a surplus of N$585 million in June, missing forecasts of N$331 million.
Goods exports grew by 14% (or N$770 million) to N$6.10 billion in July 2024, compared with July 2023. Specifically, exports of milk powder, butter, and cheese grew by 11% (or N$155 million) to N$1.60 billion. Exports of infant formula, which is used for preparations of milk, cereals, flour, and starch, surged 86% (or N$108 million) to N$235 million. Also, exports of fruit jumped 28% (or N$135 million) to N$609 million. In particular, kiwifruit exports rose by 29% (or N$100 million) to N$449 million.
Likewise, goods imports increased by 8.50% (or N$558 million) to N$7.10 billion in July 2024, compared with July 2023. Specifically, imports of petroleum and products grew by 101% (or N$664 million) to N$1.30 billion. However, vehicles, parts, and accessories imports fell by 22% (or N$217 million) to N$776 million. Passenger car imports declined by 27% (or N$165 million) to N$456 million. In particular, imports of electric passenger cars declined 81% (or N$112 million) to N$26 million.
Furthermore, New Zealand’s trade deficit narrowed to N$9.30 billion in the year ended July 2024 from N$15.80 billion in the year ended July 2023. Goods exports were N$69.40 billion in the year ended July 2024, a decrease of N$2.40 billion from the prior year. Goods imports were N$78.60 billion in July 2024, down $7.89 billion from the earlier year.
According to the European Central Bank, the Eurozone current account surplus increased to €50.50 billion in June from €37.60 billion in the previous month, surpassing forecasts of €37 billion.
Goods surpluses were €39 billion, while primary income was €14 billion. The service surplus was €12 billion. However, this was partly negated by a secondary income deficit of €14 billion.
The current account surplus tallied €370 billion (or 2.50% of the Eurozone GDP) in the year ending June 2024, an increase from €30 billion (or 0.20% of GDP) a year earlier.
The increase was mainly led by a rise in goods surplus to €359 billion from €39 billion. Also, the primary income surplus rose to €42 billion from €34 billion. Similarly, the service surplus grew to €134 billion from €127 billion. Furthermore, the secondary income deficit narrowed to €165 billion from €169 billion.
According to the final data published by Eurostat, the Eurozone consumer price index grew 2.60% y-o-y in July, following a 2.50% increase in June. The initial estimates pegged the annual Eurozone inflation at 2.60%. Economists did not anticipate any change in Eurozone inflation.
The increase in July was led by a 1.82% rise in service prices. Food, alcohol, and tobacco prices rose by 0.45%. Likewise, non-energy industrial goods prices inched up 0.19%. Energy increased by 0.12%.
Notably, Eurozone inflation stood at 5.30% in July 2023.
The weak New Zealand trade balance data and the upbeat Eurozone current account data are expected to turn the EUR/NZD pair slightly bullish in the short term.
The historical price chart indicates that the EUR/NZD pair is rising after testing the support at 1.8020. The next resistance is anticipated to be only near 1.8480. Additionally, the stochastic indicator is in the oversold region. Therefore, we anticipate the EUR/NZD pair to start gaining ground in the next few trading sessions.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
