EM Asian currencies likely to advance somewhat temporarily versus dollar due to dropped DXY Index, says Scotiabank
New Zealand exports rise in May, export volumes to drop in months ahead
New Zealand’s exports values came in at record levels in the month of May. Nevertheless, the trade balance was smaller than anticipated because of import volumes also being persistently solid. A sharp rise in petrol imports was responsible for the solid import data in May, while solid dairy export volumes strengthened export returns to an all-time high.
Unadjusted monthly trade balance came in at NZD 264 million, down on the previous month and below expectations. Exports of dairy commodities returned 15.2 percent more in May 2019 than the corresponding month one year ago, noted ANZ in a research report. The category that includes infant formula also lifted considerably this May.
Exports, on a seasonally adjusted basis, rose 4.2 percent sequentially, while imports rose 1.4 percent. Seasonally adjusted export volumes dropped for dairy and meat while exports of forestry products rose 13 percent. Solid dairy prices countered the fall in volumes resulting in a 2.3 percent rise in dairy export values, while higher meat returns were not enough to counter lower volumes.
A huge rise in petrol imports was mainly responsible for the solid import data in May. Imports rose 1.4 percent. Imports of petrol rose 18.4 percent while machinery imports rose 12.3 percent in the month.
“Looking forward, we expect to see export volumes drop away seasonally as the volume of dairy and meat products processed falls through the winter months. The recent weakness in dairy prices will also start to flow into export returns in the coming months”, added ANZ.
At 12:00 GMT the FxWirePro's Hourly Strength Index of New Zealand Dollar was slightly bullish at 50.8809 while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -48.4788 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex