Investing.com - After sliding against the U.S. dollar in Monday’s Asian session, the New Zealand dollar snapped back against Tuesday on the back of the trade deficit report.
In Asian trading Tuesday, NZD/USD soared 0.24% to 0.8362. The pair was likely to find support at 0.8207, the low of January 7 and resistance at 0.8369, the high of January 21.
Earlier today, a report released by Statistics New Zealand showed the country’s trade deficit surprisingly narrowed in December. Imports fell to an eight-month low, but still exceeded exports by USD1 billion or NZ1.21 billion. Analysts expected the gap to be wider at NZ1.87 billion.
Exports slid 3.5% due to slack global commodities demand. A strong Kiwi is also seen as one reason New Zealand exports fell last year. For the month of December, New Zealand had a trade surpluse of NZ486 million, well above the deficit of NZ105 million economists expected.
On Monday, press reports out of the country indicated that executives from the manufacturing sector are meeting with policymakers there to discuss ways of stemming the tide of the rising Kiwi.
Still, New Zealand Economic Development Minister Steven Joyce said the government does not plan to intervene in the foreign exchange market in a bid to weaken the kiwi. Joyce said the government is doing what it can to help the country’s manufacturers, but that the last time the country intervened in the currency market, the 1970s, it was mistake.
Critics of Joyce point to the fact that other large economies such as the U.S., China, Switzerland and Singapore have intervened in the currency market to great success.
Elsewhere, NZD/JPY surged 0.38% to 76.07 while EUR/NZD slid 0.27% to 1.6090. AUD/NZD lost 0.07% to 1.2483.
In Asian trading Tuesday, NZD/USD soared 0.24% to 0.8362. The pair was likely to find support at 0.8207, the low of January 7 and resistance at 0.8369, the high of January 21.
Earlier today, a report released by Statistics New Zealand showed the country’s trade deficit surprisingly narrowed in December. Imports fell to an eight-month low, but still exceeded exports by USD1 billion or NZ1.21 billion. Analysts expected the gap to be wider at NZ1.87 billion.
Exports slid 3.5% due to slack global commodities demand. A strong Kiwi is also seen as one reason New Zealand exports fell last year. For the month of December, New Zealand had a trade surpluse of NZ486 million, well above the deficit of NZ105 million economists expected.
On Monday, press reports out of the country indicated that executives from the manufacturing sector are meeting with policymakers there to discuss ways of stemming the tide of the rising Kiwi.
Still, New Zealand Economic Development Minister Steven Joyce said the government does not plan to intervene in the foreign exchange market in a bid to weaken the kiwi. Joyce said the government is doing what it can to help the country’s manufacturers, but that the last time the country intervened in the currency market, the 1970s, it was mistake.
Critics of Joyce point to the fact that other large economies such as the U.S., China, Switzerland and Singapore have intervened in the currency market to great success.
Elsewhere, NZD/JPY surged 0.38% to 76.07 while EUR/NZD slid 0.27% to 1.6090. AUD/NZD lost 0.07% to 1.2483.