New Zealand Posts Better-Than-Anticipated Trade Surplus

New Zealand Posts Better-Than-Anticipated Trade Surplus
March 26, 2020

 

The Kiwi dollar remained range-bound against the US dollar yesterday despite the release of better-than-anticipated trade surplus data by Statistics New Zealand. The release of impressive durable goods orders data by the US Census Bureau was the main reason for the NZD/USD pair to remain range-bound. The currency pair oscillated between 0.5777 and 0.5910 as neither buyer or sellers were able to overpower their counterparts.

New Zealand posted a trade surplus of N$594 million in February, compared with a trade deficit of N$414 million in the earlier month. Economists had anticipated a trade surplus of N$550 million. Dairy product exports contributed to the increase in exports last month. Specifically, exports of milk powder increased 28% y-o-y to $191 million.

Higher quantities of meat exported to the US compensated for the decline in price. Overall, the value of meat exports stood almost flat in February. Notably, exports of fish and logs declined, specifically to China, amidst the coronavirus outbreak. The total value of goods exported from New Zealand rose to $4.90 billion in February, an increase of $212 million or 4.5% on a y-o-y basis.

Darren Allan, an international statistics manager, highlighted the contribution of dairy products in realizing a trade surplus. “This month’s total goods exports were up on the same month of 2019, led by dairy exports, in particular milk powder. Dairy product exports to China remained high, but logs, meat, and fish exports were lower.”

In the US, the Commerce Department reported an unexpected rise in fresh orders for durable goods last month. Durable goods orders surged 1.2% in February, following a 0.1% increase (upwardly revised from a 0.2% decline) in the previous month. Economists had anticipated durable goods orders to decline by 1%. The unexpected rise in durable goods orders was mainly due to transportation equipment, which recorded a 4.6% increase in new orders in February, after declining by 0.9% in the earlier month.

Nevertheless, barring the surge in new orders for transportation equipment, durable goods orders declined by 0.6% in February, after rising by 0.6% in the earlier month. Economists had anticipated a 0.4% decline for the reported period. The positive data from both countries are expected to keep the NZD/USD pair range-bound with bullish bias in the short-term.

Technically, the currency pair is trading above its 50-day moving average. Additionally, the RSI indicator is also having a reading above 50. The next resistance is anticipated only near 0.6150. Therefore, we are expecting the currency pair to rally in the days ahead.

NZD - technical analysis - 26th March 2020

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.

Sammy

Sammy

Sammy is our forex expert, with over 20 years experience in the financial sector, she will be keeping you up to date with the ups and downs of currencies around the world


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