Today’s positive fundamental data triggered the rise in the NZD.
Balance of foreign trade of New Zealand, which became known earlier today, was at the level of 127 million NZD in June. Note that foreign trade balance of the country has been positive for the sixth consecutive month.
Positive effect on the rise in the pair NZD/USD was also caused by the rise in the Japanese Yen. According to Japanese media, Japanese Minister of Finance, Mr. Taro Aso said that incentive measures program were under consideration, which lowered expectations of introduction of such measures in the near future.
Japan is one of the largest trading partners of New Zealand. The decline in the USD against the Yen has affected the pair NZD/USD.
However, positive data on the New Zealand’s trade balance cannot stop the RBNZ from lowering interest rate. Last week the Bank announced its plans to lower interest rates in August.
Market participants believe that the RBNZ will lower interest rates in August or November and current interest rate at the level of 2. 25% may be reduced to 1.7% by the end of the year.
Traders will gradually switch their attention to a two-day meeting of the US Fed, which will start today. Tomorrow at 20:00 (GMT+2) Fed’s interest rate decision will be announced. It is likely that the rate will be left unchanged. US positive macro-economic statistics and mitigation of concerns about negative affect from Brexit make investors think that the Fed may raise interest rate this year.
Futures for the interest rates of the US Fed show 20% probability of the increase in rates in September against 12% this month. Probability of the rate hike in December is 51%.
Expectations of the decrease in the interest rate in New Zealand and a chance of the monetary policy tightening in the USA will be the main impetus in the pair NZD/USD until the end of the year.