Improving Trade Balance Helps NZ Dollar Weather China’s Downgrade

The New Zealand dollar fell together with other commodity currencies after the surprise cut of China’s credit rating (the fact that the Asian country is the biggest trading partner of New Zealand was not helping the matter). Yet the currency has recovered as of now, partially due to the help of positive domestic data.

New Zealand’s trade balance showed a surplus of NZ$578 million in April, up from NZ$277 million in March, reaching the highest level since 2015. That is instead of falling to NZ$268 million as analysts predicted. The favorable report allowed the kiwi to weather the China’s credit rating downgrade by Moody’s better than some other currencies, though markets have recovered from the shock by now anyway.

NZD/USD rose from 0.7007 to 0.7027 as of 10:06 GMT today, bouncing from the daily low of 0.6987. EUR/NZD declined from the open of 1.5940 to trade at 1.5899 after rallying to the daily high of 1.5992.

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