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Euro to New Zealand Dollar (EUR/NZD) Exchange Rate Drops after upbeat ‘Kiwi’ Trade Data

European Flags

After a dull few days for the ‘Kiwi’ the currency finally experienced some movement overnight as trade balance data for New Zealand were published.

The New Zealand Dollar advanced on the majority of its most traded currency counterparts as the report showed that the smaller South Pacific nation recorded its first 12-month surplus for nearly two years.

New Zealand’s trade surplus stood at 306 million Dollars last month (a January record) down from a revised 493 million Dollars in December.

The impressive result was largely due to increasing demand from China, and the New Zealand Dollar was further supported by the news that the Fonterra Cooperative Group Ltd. raised its projected milk payout to farmers.

Exports to China (New Zealand’s largest trading partner) surged by 590 million last month, although exports to Australia declined as New Zealand’s neighbour struggled.

A senior Westpac economist responded to the report in the following way; ‘The strength of Chinese demand for New Zealand exports continues to be a feature of trade data. Strong demand is leading to high international prices for New Zealand’s key commodity exports, and providing a significant income boost for exporters. We expect this to flow through the broader New Zealand economy in a myriad of ways over the coming year, including via a boost to consumption and investment spending.’

The ‘Kiwi’ advanced on several of its major currency rivals during Australasian trading, rallying against a floundering ‘Aussie’ and strengthening against the Euro.

The New Zealand Dollar largely retained gains against its common currency rival as European trading began.

However, the Euro went on to strengthen as German unemployment declined by 14,000 rather than the 10,000 expected. The nation’s unemployment rate held at 6.8 per cent.

With Eurozone economic/consumer/industrial confidence reports and German inflation data still to be released today, further movement in the EUR/NZD pairing can be expected.

New Zealand’s building permits, activity outlook and business confidence figures may have an impact overnight.

Of course, investors will also be looking to America and Fed Chairman Janet Yellen’s testimony to the senate.

Euro (EUR) Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate , 
Euro,,US Dollar,1.3657 ,
Euro,,British Pound,0.8205 ,
Euro,,Australian Dollar,1.5316 ,
Euro,,New Zealand Dollar,1.6390 ,
Euro,,Canadian Dollar,1.5199 ,

As of 09:05 GMT