The New Zealand dollar headed higher today with help of the positive trade balance data as well as due to speculations that the currency has fallen too far too fast.
The New Zealand trade balance demonstrated a deficit of NZ$472 million in August, down from NZ$724 million in the previous month. Analysts expected an increase to $1.13 billion.
Currently, there is a general trend on the Forex market for the currencies to reverse their movement as the US dollar halted its rally. In case of the New Zealand currency, technical analysts argue that the relative strength index shows that the kiwi is in an oversold condition and should reverse its drop. Indeed, NZD/USD was in decline since the beginning of July, giving away all the gains that the currency pair had made since the start of the year.
NZD/USD rose from 0.8050 to 0.8081 as of 5:47 GMT today. EUR/NZD dropped from 1.5956 to 1.5901. NZD/JPY ticked up from 87.65 to 87.97 but pulled back to 87.74 later.
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