On Wednesday (25 / March), the New Zealand Department of Statistics released Trade Balance data for February 2020 with a surplus of $ 594 million. This figure is better than economists forecast forecasting a surplus of $ 550 million, and better than the previous month's deficit of $ 414 million.

The New Zealand trade balance surplus was largely supported by increased shipments of dairy products to China by 28 percent ($ 191 million) on an annual basis. On the other hand, there was a decline in exports of forestry products by 27 percent ($ 124 million) and fishery products by 27 percent ($ 42 million). If recapitulated as a whole, total New Zealand product exports in February rose 4.5 percent ($ 212 million) to $ 4.9 billion.

Allan added, "Although facing Covid-19, milk exports to China remain high, but log exports, meat, and fish are lower ... What is surprising is, for the first time since early 2019, beef exports to the US are higher than to China. "

The February Trade Balance data is quite impressive, but it should be noted that last month the Corona pandemic did not reach mainland New Zealand. The latest data shows that Coronavirus sufferers have reached 47 people in the country.

NZD / USD Trying to Continue Rally

The number of Corona cases is projected to increase given that the spread of the virus has not yet reached its peak in New Zealand. The New Zealand government has decided to lock down to prevent the spread of Covid-19, starting from Wednesday (25 / March) at 00:00.

The Director-General of Health of New Zealand, Dr. Ashley Bloomfield, said that the number of cases will continue to increase at least for calculations made during the past 10 days before lockdown.

When this news was revealed, the pair NZD / USD was at the level of 0.5819, trying to continue the rally that had taken place since the trading session on Tuesday. Apart from the February trade balance surplus above expectations, the strengthening of the New Zealand Dollar was largely due to risk-on sentiment, following the rebound of the US stock market and good news from China related to the shrinking in the number of new Corona cases.

The New Zealand Dollar posted a weakening of almost 2 percent gain against the US Dollar in today's trading (March 23). The position of NZD / USD has been trapped in the lowest range since May 2009. The kiwi also weakened versus its neighboring currency, AUD, after the central bank released its Quantitative Easing program. Moreover, the government announced the start of a national lockdown for a month; the first drastic decision was taken by one of the major currency countries.

For the sake of Maintaining Financial Market Liquidity, RBNZ Bought New Bonds

This morning, the Reserve Bank of New Zealand (RBNZ) announced a program of buying new bonds worth around 30 billion dollars over the next 12 months to maintain financial market liquidity.

Meanwhile, Prime Minister Jacinda Ardern launched a salary subsidy of around 9.3 billion dollars. He also announced a national lockdown for at least the next 4 weeks, starting next Wednesday.

Until now, New Zealand has recorded a total of 102 Coronavirus infections. There are no casualties at all. However, the local government considers it necessary to take drastic steps, because community transmission is thought to have started (not just infections brought by migrants from abroad).

Furthermore, Shirley believes that the difference between interest rates and economic data is no longer relevant in evaluating the current exchange rate. All that can be done by market participants is to monitor the latest headlines and try to translate whether the news is good or bad from an economic point of view.