Australian Dollar Eyes Developments in New Zealand

The New Zealand trade deficit widened far more than expected during the month of April, as the balance tumbled to –NZ$334.1 million versus forecasts of a reading of -$150 million. However, a breakdown of the balance shows that imports were responsible for this move, as the balance jumped to NZ$4.13 billion. The gain was due primarily to one-time purchases related to the exploration of oil fields, as this led to the includsion of an oil platform and production vessel worth a combined NZ$477 million. Meanwhile, exports surged to a record high of NZ$3.795 billion on the back of rocketing prices for dairy products. Nevertheless, the New Zealand dollar barely registered a response to the news, as trade in all of the commodity dollars – including the Australian and Canadian dollars – proved lackluster. Given the subdued trading in the commodity markets amidst the US holliday and broad lack of economic indicators scheduled to be released this week, the currencies may continue to see quiet price action.