The New Zealand dollar managed to gain yesterday despite the very bad trade balance, but reversed gains today. The currency dropped rather sharply at the beginning of the current trading session and remains soft as of now.
The New Zealand trade balance posted the deficit of NZ$774 million in July. It is compared to the consensus forecast of $18 million deficit. It was the biggest shortage in 10 months. Moreover, the figure was the worst July reading since 2008.
The performance of the New Zealand currency looks rather puzzling as it did not react too much on the negative report the day it was released, but showed significant weakness on the next day. Whatever the cause for such behavior, the kiwi is quite soft right now.
NZD/USD rose from 0.7801 to 0.7847 yesterday, but dropped to 0.7814 as of 1:52 GMT today. NZD/JPY advanced from 76.90 to 77.30 on the previous trading session before trading at 76.74 on the current session.
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