NZ Dollar Slides As New Zealand Trade Deficit Rises
September 25 2016 - 9:53PM
RTTF2
The New Zealand dollar continued to be weak against other major
currencies in the Asian session on Monday, after data showed that
New Zealand trade deficit rose more than expected in August.
Meanwhile, speculation triggered that the Reserve Bank is likely to
cut the official cash rate in November.
Data from Statistics New Zealand showed that New Zealand had a
merchandise trade deficit of NZ$1.265 billion in August. This
missed forecasts for a shortfall of NZ$735 million following the
NZ$433 million deficit in July.
Exports were worth NZ$3.39 billion, shy of forecasts for NZ$3.60
billion, and down from NZ$3.96 billion in the previous month.
Imports came in at NZ$4.65 billion versus expectations for NZ$4.30
billion and up from NZ$4.40 billion a month earlier.
The currency weakness continued after the Reserve Bank of New
Zealand (RBNZ) reinforced last Thursday that further easing would
be necessary despite rapid growth in the economy. RBNZ governor
Graeme Wheeler maintained the OCR at a record low 2 percent at the
last week's policy meeting.
Last Friday, the NZ dollar fell 0.98 percent against the U.S.
dollar, 0.71 percent against the yen, 1.08 percent against the
euro, and 0.73 percent against the aussie.
In the Asian trading, the NZ dollar fell to a 5-week low of
72.83 against the yen, nearly a 5-week low of 1.5552 against the
euro, and nearly a 4-week low of 0.7220 against the U.S. dollar,
from Friday's closing quotes of 73.11, 1.5486 and 0.7239,
respectively. If the kiwi extends its downtrend, it is likely to
find support around 71.00 against the yen, 1.57 against the euro,
and 0.71 against the greenback.
Against the Australian dollar, the kiwi dropped to 1.0538 from
Friday's closing value of 1.0516. The kiwi is likely to find
support around the 1.07 region. Looking ahead, the German Ifo
business climate index for September and U.K. BBA mortgage
approvals for August are due to be released later in the day.
At 4:30 am ET, European Central Bank's executive board member
Yves Mersch and Swiss National Bank Governing Board Chairman Thomas
Jordan are expected to speak at Sibos 2016 financial industry
conference, in Geneva.
In the New York session, U.S. new home sales data for August is
slated for release.
At 8:30 am ET, European Central Bank's member of the supervisory
board, Ignazio Angeloni, speaks at a conference "Strengths and
Weaknesses of European Banking" organized by Brevan Howard Centre
and Imperial College Business School, in London.
At 9:00 am ET, European Central Bank President Mario Draghi will
testify before the Committee on Economic and Monetary Affairs of
European Parliament, in Brussels.
At 9:30 am ET, Minneapolis Fed President Neel Kashkari
participates in a fireside chat moderated by Harry Melander,
president of the Minnesota Building and Construction Trades Council
and board member of the Federal Reserve Bank of Minneapolis, in
Minneapolis, U.S.
Fifteen minutes later, European Central Bank Vice President
Vitor Constancio is expected to speak at a conference, in
Frankfurt.
At 11:45 am ET, Federal Reserve Governor Daniel Tarullo will
deliver a speech titled "Next Steps in the Evolution of Stress
Testing" at the Yale School of Management Leaders Forum, in New
Haven.
At 12:00 pm ET, Austrian National Bank Governor and ECB
Governing Council member Ewald Nowotny is expected to speak on the
future of banks, in Vienna.
At 1:30 pm ET, Federal Reserve Bank of Dallas President Robert
Kaplan will participate in moderated Q&A before the Independent
Bankers Association of Texas Annual Convention, in Dan Antonio.
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