NZD/USD edges higher supported by Chinese trade balance data

New Zealand dollar traded higher against its US counterpart on Friday, after a report showed Chinese exports rose at a faster than projected pace in October, following the surprising decline a month ago.

NZD/USD climbed to a session high at 0.8350 at 7:40 GMT, after which consolidation followed at 0.8330, rising 0.07% for the day. Support was likely to be received at November 7th low, 0.8308, while resistance was to be encountered at November 7th high, 0.8396.

According to a report released earlier on Friday, Chinas exports rose at a faster than anticipated pace in the month of October. Export figure climbed 5.6% in October 2013 compared to October 2012, following the 0.3% dip registered in September. Experts had expected an increase by 3.2%. At the same time, imports rose 7.6% in October, less than projections, pointing an 8.5% gain. This resulted in a trade surplus at the amount of 31.1 billion USD. This export result, accompanied by upbeat data out of South Korea and Taiwan, suggested not so apparent, but still a gradual improvement in global demand. The kiwi dollar, alongside the Aussie, was supported after this news, as China is New Zealands largest export partner.

Chinese policymakers are expected to hold a meeting during the weekend to discuss reforms, while a set of crucial economic data, including retail sales and consumer inflation, is to be released out of the country. These data points would certainly impact demand for the New Zealand dollar on Monday.

Meanwhile, on Thursday it became clear that US economy expanded at a sharper than expected rate during the third quarter of the year. Nation’s Gross Domestic Product rose at an annualized rate of 2.8% in Q3, following the 2.5% expansion in Q2, and marking the best quarterly performance this year. Expectations pointed a 2.0% increase in GDP. This report has been delayed due to the 16-day partial government shutdown in the country, but however, it encompasses all fundamental data. Consumer spending, which comprises over two thirds of US GDP value, rose 1.5% during the third quarter of the year, marking the slowest annual rate of increase during the past three and a half years. In Q2 consumer expenditures increased 1.8%. US consumers have spent more on durable goods and less on services.

Now market players began focusing on the crucial US employment data, scheduled for publication later in the day. The non-farm payrolls probably rose by 120 000 in October, after a gain of 148 000 jobs in September, according to a survey of experts by Bloomberg News. In case expectations are exceeded, the greenback will certainly gain appeal.

NFP data will be followed by the preliminary reading of the index of consumer confidence, based on surveys by Thomson Reuters and the University of Michigan. It is expected that the index will advance to 74.5 in November from a final value of 73.2 recorded in late October.

Elsewhere, the kiwi was steady against the euro, with EUR/NZD cross ticking up a mere 0.02% on a daily basis to trade at 1.6130 at 10:13 GMT. French industrial output was reported to have decreased in September, as production of automobiles and in refineries dropped suddenly. Production shrank 0.5% in September compared to August, after a month ago it climbed 0.7%. Experts had projected that output will improve 0.1% in September. Manufacturing production in the country fell 0.7% in September on a monthly basis, following a 0.9% gain in August. Annual manufacturing output contracted 1.3% in September. Automobile production dropped 3.4%, while refinery output fell 2.1% in September.

AUD/NZD pair was also little changed, up 0.01% to trade at 1.1366 at 10:14 GMT.