According to the official report, New Zealand’s trade balance deficit shrank in Q4 2015. The country’s external debt is reported to have got smaller as well, Market Leader reports.
The deficit improved up to -2,61 billion NZD, the country’s statistical agency reports. On top of that, we should say that this was a major improvement given the fact that the previous reporting period indicated a deficit equal to -4.75 billion NZD. Moreover, the actual figures turned out to exceed analyst expectations. The thing is that they had expected the deficit to improve only up to -2,8 billion NZD.
At the same time, economists and financial experts say that an external trade deficit indicates higher imports and lower exports, which means that there is a net flight of capital going on in the given economy. Yet, a deficit usually presses a national currency.
It is also important to keep in mind that New Zealand’s external account showed a deficit as well. It reached -7,71 billion NZD, which is roughly 3.1% of the national GDP. However, the country’s net external debt shrank down to 135,8 billion NZD or 55,2% GDP over the reporting period.
FOREX
In the meantime, Masterforex-V Academy reports that the N.Z. Dollar is still trying to recovery from the same mid-term downtrend against U.S. Dollar. For now, NZDUSD is forming wave A/B of level Daily. There is a minor wave being formed inside of it – wave b(C ).
On breaking below the local low of 0.6574, the currency pair is going to resume the downtrend. If that’s the case, the closest levels of support are 0.6540/26, 0.6463/57. Alternatively, a break above the top of the descending MF sloping channel and MF pivot 0.6772 is going to put an ned to the downtrend.
