The NZD/CHF currency pair edged lower on Thursday, with the kiwi dollar under pressure even as fresh trade figures out of New Zealand pointed to a markedly stronger external sector.
New Zealand’s trade surplus widened sharply in April to a record NZD 1.92 billion on a month-over-month basis, up from NZD 0.43 billion in March. The result significantly exceeded market expectations of a NZD 0.98 billion surplus, underlining a much stronger trade position than anticipated.
The record surplus was fueled by a notable jump in outbound shipments, with exports climbing to an all-time high of NZD 8.6 billion.
While external demand looks solid, the domestic economic environment appears less convincing. Recent indicators have pointed to slower momentum at home, encouraging the Reserve Bank of New Zealand to keep a cautious approach to any additional policy tightening.
With the economy having only recently exited a recession and still operating with meaningful spare capacity, policymakers are wary of tightening financial conditions too aggressively. The RBNZ is expected to avoid measures that could derail a fragile recovery.
The Forex pair is also losing ground as the Franc strengthens amid a pick-up in risk aversion. Market sentiment has been affected by uncertainty surrounding United States-Iran dynamics and more hawkish-leaning monetary policy signals.
In Switzerland, preliminary figures released on Monday indicated that the domestic economy expanded 0.5% quarter-on-quarter in the first three months of the year, up from 0.2% growth in the preceding quarter. This represented Switzerland’s strongest quarterly performance in a year and pointed to a steady recovery trajectory.
The NZD/CHF currency pair was last down 0.09% on the day to trade at 0.4610.
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