The New Zealand dollar gained today against major currencies. One of the possible reasons for the gains was profit-taking after yesterday’s huge slump. Another one was positive data from China — the world’s second-largest economy and New Zealand’s biggest trading partner. The gains were limited, though, as central bank’s assistant governor suggested a possibility of another interest rate cut.
China’s trade surplus shrank to $45.1 billion in July from $51.0 billion in the previous month. Nevertheless, it was better than the consensus forecast of $43.2 billion. Exports rose unexpectedly by 3.3%, year-on-year, instead of falling by 2% as markets were expecting. Imports fell by 5.3%, but the drop was not as big as 8.3% predicted by experts.
Meanwhile, Christian Hawkesby, assistant governor at the Reserve Bank of New Zealand, signaled that the central bank may cut interest rates again in the foreseeable future:
Weâve got a more balanced outlook for the OCR now…but even within those projections thereâs some probability in there that we will need to reduce the OCR from where it is at the moment.
The RBNZ surprised markets yesterday, cutting the main interest rate by 50 basis points, whereas market participants were expecting just a 25 basis point cut.
NZD/USD edged up from 0.6444 to 0.6452 as of 10:58 GMT today. EUR/NZD went down from 1.7370 to 1.7354. NZD/JPY was little changed at 64.46.
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