When is the Kiwi trade balance and how could it affect the NZD/USD?

New Zealand Trade Balance overview

The monthly Trade Balance figure from Statistics New Zealand gives insight into the economic conditions within New Zealand, whose economy is heavily trade-dependent. NZ is a major exporter of dairy goods and other agricultural products, and an importer of industrial machinery, metals, and fossil fuels. 

With nearly a fifth of NZ's trade balance held with Australia, downturns and falling activity within Australia's economy can have knock-on effects with New Zealand's growth prospects. 

With the February data in the pipe for 21:445 GMT today, year-on-year figures for NZ's Trade Balance for January came in at a deficit of $-3.22B, compared to December's deficit of $-2.8B, while the month-on-month figure for January hit at $-566M.

How could the Trade Balance affect the NZD/USD?

The overall impact is likely to be minimal as the Trade Balance is heavily reliant on not only demand from Australia, but also weather. A rash of storms or floods can negatively impact NZ's trade capabilities, and widen the trade deficit, driving the Kiwi lower. With the recent roiling in global markets about trade balances as US President Trump prepares to spark trade wars with major trading partners, traders' eyes are drifting to trade figures more than usual. 

Key notes

With the RBNZ's new employment mandate added to the Policy Target Agreement and a new Governor taking over at the central bank, the RBNZ's moves are going to be watched carefully as traders anticipate an adjustment to the RBNZ's policy approach depending on how trade figures drop.

About the Trade Balance report

The Trade Balance released by the Statistics New Zealand is a measure of balance amounta between imports and exports. A positive value shows a trade surplus while a negative value shows a trade deficit. Any variation in the figures influences the domestic economy. If a steady demand in exchange for exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the NZD.