"Large price-driven increases in values this dairy season, compared with last, led to record total export values. However, April 2014 is the first month since August 2013 where the export value was not a record for the month."
-Jason Attewell from Statistics New Zealand
The New Zealand Dollar plunged to its one-month low against the U.S. visa vie, with macroeconomic indicators from New Zealand looking poorer than one year ago, as rising interest rates start to have impact on the economy. The NZD/USD currency pair struggles to move below the important support around 0.85-mark. The level is unlikely to be broken, keeping in mind bullish signals from aggregate technical indicators, as well as expected weak fundamentals from the world's largest economy.
Statistics New Zealand said that the excess of exports over imports stood at $534 million last month from a revised $935 million a month earlier, coming slightly weaker than the market consensus of a $634 million surplus. Shipments still were 14% higher on a yearly basis, totalling $4.5 billion, mostly led by dairy products exports. At the same time, imports climbed 5% over the same period, hitting $3.96 billion, coming almost in line with analysts' forecasts, with capital goods leading the increase. Despite the decline in the trade surplus, strong demand in the dairy industry still provides a solid support for the trade balance.
The NZD/USD currency pair has been trading in a narrow range since the latest RBNZ meeting. The pair is not moving higher due to less hawkish comments and weaker fundamentals, however, it is a good sign for policymakers, which closely monitor the exchange rate.
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