NZ Dollar Pares Losses But Remains Vulnerable

The New Zealand dollar pared its earlier losses during the Wednesday’s trading session but remains vulnerable as fundamentals, both domestic and overseas, are negative for the currency.

New Zealand’s current account balance deficit (seasonally adjusted) widened by NZ$175 million to NZ$2.6 billion in the December 2014 quarter from the previous three months. The Global Dairy Trade Price Index dropped 8.8 percent since the beginning of March. The domestic data, coupled with prospects of monetary tightening in the United States and economic slowdown in China, made the trading environment highly adverse for the New Zealand dollar.

NZD/USD traded near the opening level of 0.7316 as of 12:25 GMT today following the drop to 07274. NZD/JPY edged down from 88.72 to 88.67, reaching the low of 88.21 intraday.

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