NZ Dollar Stable Despite Drop in Overseas Trade Index

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.
If you have any questions, comments, or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

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