New Zealand’s trade balance in July moved into deficit territory after having reported a 6 month surplus streak. Statistics New Zealand posted a decline of -433 million New Zealand dollars (Kiwi), falling deeper than expectations of -350 million and far from previous month’s surplus. Uncertainty in the country’s biggest trade partners compounded by the strength of the Kiwi weighed on exports for the month of July. A decline in the trade balance is expected to have an effect on the country’s growth this year.
The Reserve Bank of New Zealand has cut interest rates many times in almost a year with the most recent rate cut of 25 basis points occurring in August and dropping rates to record lows of 2.00%. RBNZ Governor Graeme Wheeler stated that the efforts of the central bank are to meet its inflation target of between 1.00% and 3.00%. The bank governor expressed at the start of the week that current interest rates can handle further cuts that will eventually lead to a higher consumer price index. Continuing his speech, a 35 basis point rate cut may be enforced in the upcoming meetings by policymakers with the first monetary policy announcement coming out as soon as the 22nd of September. The New Zealand dollar against the US dollar continued on its upwards daily channel formation, reaching a high of 0.7344 at the time of writing.
Feeble Fundamentals Push RBNZ Policymakers
Andamento del mercato - 24/08/2016