24 Jul 2015
Deteriorating trend in New Zealand’s trade accounts to continue – ANZ research
FXStreet (Mumbai) - The research team at ANZ believes the deteriorating trend in New Zealand’s trade accounts to continue and the annual trade deficit is expected to widen towards 4% of GDP by mid-2016. The official data released today showed the NZ trade accounts in June fell into a USD 60 billion deficit.
Key Quotes
“Following a positive surprise in May, today’s data re-established a deteriorating trend in New Zealand’s trade accounts. We expect that to continue. The official trade numbers are yet to fully reflect the latest weakness in export commodity prices.”
“Within today’s figures, the implied milk powder, butter and cheese export price was NZ$4,200/tonne. There are admittedly compositional and timing issues to consider, but the average GlobalDairyTrade price at the most recent auction was NZ$3,150/tonne.”
“A lower NZD will eventually help generate an improved trade performance. But this will take some time to play out. In the meantime, the deteriorating trade picture will be another factor maintaining downward pressure on the NZD, particularly given the weakening export commodity price backdrop.”
Key Quotes
“Following a positive surprise in May, today’s data re-established a deteriorating trend in New Zealand’s trade accounts. We expect that to continue. The official trade numbers are yet to fully reflect the latest weakness in export commodity prices.”
“Within today’s figures, the implied milk powder, butter and cheese export price was NZ$4,200/tonne. There are admittedly compositional and timing issues to consider, but the average GlobalDairyTrade price at the most recent auction was NZ$3,150/tonne.”
“A lower NZD will eventually help generate an improved trade performance. But this will take some time to play out. In the meantime, the deteriorating trade picture will be another factor maintaining downward pressure on the NZD, particularly given the weakening export commodity price backdrop.”