2016-10-27 12:18:49

Foreign trade deficit in New Zealand has increased to 1.436 million NZD in against the forecast of 1.15 million NZD and -1.243 million NZD in August. On the annual basis foreign trade deficit amounted to 3.4 billion NZD against 3.1 billion NZD in August.

However, market participants hardly responded to the increase in the foreign trade deficit, which was mainly due to the increase in imports of certain goods into the country. At the end of the Asian session the NZD was at the level of 0.7155.

The highest rate of the foreign trade deficit in New Zealand was recorded in February 2016 at the level of 7.3 billion NZD. It is obvious that the tendency of the reduction in the foreign trade deficit continues, which is a positive factor for the NZD. The NZD is supported by the improvements in foreign trade on the background of the decline in supply of the dairy products in the world and almost inevitable rise in the prices of the dairy products, the main item of exports in New Zealand.

Interest rates in New Zealand remain relatively high, although it is likely that the rates will be lowered.

Current interest rate in New Zealand is at the level of 2%, which is one of the highest level in the world among countries with advanced economies.

This fact attracts investors who make profit by carrying out buy positions on the NZD, and the traders using "carry-trade" strategy when more expensive currency is bought at the expense of a cheaper currency.

Although it is likely that the Reserve Bank of New Zealand will again reduce interest rate in November at the meeting scheduled for November 9 and possibly in the first six months of 2017, the New Zealand dollar maintains its position in the foreign exchange market and the pair NZD/USD remains in the uptrend.

Today US news will be known as follows: at 12:30 – number of initial requests for unemployment benefits from the US Labor Department. A month ago the number of requests was 260 000 and the number of orders for durable goods in September. This indicator shows the number of orders received by manufacturers of durable goods, which requires large investments. The forecast is +0.1%.

At 14:00 – index of pending home sales in September.

NZD/USD: Foreign trade deficit has increased.  Fundamental analysis for 27/10/2016