The New Zealand dollar was stable today, staying flat against most of its rivals and even gaining on some of them. That is despite the worse-than-expected trade report released on Wednesday.
Statistics New Zealand reported that the Overseas Trade Index dropped by 4.7% in the September quarter compared with the June quarter after rising by 2.4% in the previous three months. The drop was bigger than 3.7% predicted by economists. Furthermore, that was the worst trade contraction since June 2009.
The GDT Price Index climbed by 4.3% from the previous auction, which happens twice a month. The increase is especially interesting because Stats NZ blamed a drop in dairy export prices for the worst decline in terms of trade in a decade. Export prices for dairy products fell 12% last quarter. Does the current increase in prices indicate a rebound in dairy exports? Not necessarily. Business prices manager Bryan Downes explained:
Global dairy trade (GDT) prices rose overall in the same period; however, the GDT only represents a proportion of the dairy products exported by New Zealand.
He added further:
Dairy values have been the most affected with a 16 percent drop in the quarter compared with a 3.3 percent fall in dairy volumes exported.
Next on New Zealand’s macroeconomic calendar are building consents and ANZ commodity prices released early in Thursday’s Asian session.
NZD/USD was flat at 0.7062 as of 8:47 GMT today. GBP/NZD dropped from 1.8991 to 1.8922. NZD/CAD was up from 0.9131 to 0.9153 intraday but has pulled back to 0.9134 as of the time of writing.
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