The New Zealand dollar was trading lower late Monday following a sharp sell off against the euro on technical reasons, weak trade data and positioning ahead of central bank meetings. Buyers were selling the New Zealand dollar in favor of the euro after the pair broke through a trend line that has been in place since May 2011. The release of local terms of trade data for the third quarter also weighed on the currency after it came in worse that markets had been expected. Statistics New Zealand said the merchandise terms-of-trade index fell 3.2% from the second quarter, worse than the median forecast for a 2% fall in a Wall Street Journal poll of nine economists. The index was down 9.1% compared with the year-earlier quarter. The overseas merchandise-trade-price indexes measure changes in the prices of New Zealand’s imports and exports. Market had expected a fall of 8.1%. Expectations of central bank meetings in both New Zealand and Australia are also putting pressure on the Kiwi. The Reserve Bank of New Zealand is due to meet Thursday and economists unanimously expect the central bank to keep rates on hold. NZD was trading at US$0.8198, down from US$0.8228 late Friday. The local currency was buying 0.7883 Australian dollars from A$0.7889 Friday, and at 0.6288 euro compared to EUR0.6332 Friday.
EasyForexNews Research Team