New Zealand Dollar to Australian Dollar (NZD/AUD) Exchange Rate close to one-month high on trade surplus data

Pound to Australian Dollar exchange rate graph

The New Zealand Dollar climbed by more than a half a cent to push close to a one-month high against its Australian relation as it found support from positive trade surplus data and a negative private capital expenditure report out of Australia.

According to Statistics New Zealand, the smaller south pacific nation posted a trade surplus of $306 million in January, a record figure for the first month of the year. The figure was a smaller decline than economists had forecast and marked a third consecutive monthly trade surplus.

Trade was bolstered by increased sales of dairy products to China. Exports to the world’s second largest economy soared by $590 million or by 92% to $1.2 billion last month led by exports of milk powder and cheese. China accounted for 30% all New Zealand exports, cementing its position as the nation’s biggest trading partner. Exports to Australia meanwhile fell by 13% and imports dropped also.

“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 consumer spending,” said a senior economist at Westpac Banking Corp.

The New Zealand Dollar was also supported by news that Fonterra Cooperative Group, the nation’s biggest dairy company, said that it had raised its forecast payout to dairy farmers to a record high.

Also aiding the ‘Kiwi’s’ advance was the release of data which showed that private capital expenditure in Australia fell more-than-expected in the last quarter.