The New Zealand dollar rose about 1 US cent after the value of the nation's exports hit a record in March and contributed to a higher than expected trade surplus for the month. It was trading at 60.93 US cents at 5pm in Wellington from 59.97 cents at the same time yesterday. The trade-weighted index was at 68.78 from 68.02.
New Zealand's exports rose to $5.8 billion in March, up 3.8 per cent from a year earlier and a record value for any month. Stats NZ said fruit was the standout with exports up 54 per cent but dairy exports rose 7.6 per cent and meat rose 11 per cent. The trade surplus for the month was $672 million.
"That trade data this morning was very good if you go into the detail," said Tim Kelleher, head of foreign exchange sales at Commonwealth Bank of Australia.
ASB economist Nathan Penny said he had been expecting a surplus of about $500m. "We expect NZ's goods exports to hold up relatively well over 2020 while NZ's service exports – read tourism – bear most of the brunt from Covid-19.”
Kelleher said the market's attention was now focused on what the Federal Reserve would say after its latest meeting early tomorrow, New Zealand time. He doesn't expect much from the Fed but noted that the market may be disappointed.
"The market's talking about the Fed going negative," in terms of interest rates. "The market's convinced itself of doom and gloom and the Fed's going to save them."