NZD/USD on positive ground despite downbeat NZ trade balance

New Zealand dollar managed to recover from earlier losses against the greenback on Monday, in spite of the downbeat trade balance data out of New Zealand, while the lack of clarity over the future of Feds monetary stimulus continued to persist.

NZD/USD hit a session high at 0.7836 at 6:57 GMT, after which the pair consolidated at 0.7830. Support was to be received at August 5th low, 0.7737, while resistance was to be encountered at August 21st high, 0.7967.

Earlier on Monday an official report showed that New Zealands trade balance registered a deficit at the amount of 0.774 billion NZD in the month of July, significantly mismatching expectations of a much lesser deficit of 0.016 billion NZD, following the 0.374-billion-NZD surplus in June. This was the most considerable deficit figure since September 2012, as import rose to its highest level in five years, by 17% annually to 4.62 billion NZD, because of the purchases of helicopters and crude oil. Upon the release of this indicator the kiwi plunged against peers.

Additionally, last week RBNZ Governor Wheeler said that the national currency was overlvalued, which obstructed export growth.

Meanwhile, on Friday last week the Department of Commerce said that new home sales in the United States decreased significantly to their lowest level in the past nine months in July, giving boost to concerns that rising mortgage rates may obstruct US housing market recovery. Sales of new homes tumbled by 13.4% to reach annual 394 000 units in July compared to June. The recorded drop was the strongest in three years, as sales hit their lowest point since October 2012. Experts had anticipated that new home sales will reach 490 000 units.

This data came a day after another report showed an increase in weekly US initial jobless claims, as both indicators brought to life again the uncertainty over the future of Federal Reserve Bank’s stimulus program.

Elsewhere, the kiwi dollar was higher against the Aussie, as AUD/NZD cross erased 0.16% to trade at 1.1546 at 7:46 GMT.