The New Zealand strengthened today as the favorable data from the U.S. added to the signs of the economic recovery, while the New Zealand’s trade surplus may prompt the central bank to increase the interest rates; against the U.S. dollar the kiwi experienced volatility and currently fell.
The predictions that the U.S. employers offered more jobs last month together with the rising equities (Standard and Poorâs 500 Index rose by 0.5 percent) add to the evidences of the global recoveries and diminish the impact of the European crisis on the global markets. The Australia’s economy also helps the Aussie’s gains as the trade surplus reached 11 percent in April. The exports may increase even more as the growing Chinese economy can boost China’s demand for New Zealandâs milk and wool.
The economic data may drive the central bank’s Governor Alan Bollard to increase the interest rates at the next meeting of the Reserve Bank of New Zealand, even though he’s unwilling to do so as the higher rates will lead to the stronger currency. And the strong currency is undesirable on Bollard’s opinion as:
A gradual depreciation of the New Zealand dollar remains desirable for a sustainable rebalancing of the New Zealand economy, as it would boost export returns and discourage household spending on imports
AUD/NZD traded near 1.2317 as of 16:45 GMT today after it opened at 1.2345. EUR/NZD traded at 1.7868. NZD/USD dropped to 0.6804 after opening at 0.6813 and jumping to the daily highest level of 0.6898.
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