New Zealand 1Q current account data was released during the Asian session. This was a positive surprise: 1,3bn NZD vs. 0,96bn expected and after -2,6bn in 4Q (data not seasonally adjusted).
This moved the yearly C/A to GDP ratio to -3% as expected, from -3.2%.
NZD reacted positively and managed to cross the 0.70 line vs. USD. it is 0.51 today against the US dollar as there is a wave of broader USD weakness right now, on top of the supportive NZ C/A data.
NZD will also see another market mover today in the form of a milk auction. The previous season was weak with the final payout to farmers at 3.90 NZD/kg (much below production costs) and the current one has also started weak, but the early forecasts are now at about 4,25 NZD/kg (still below the profitability threshold).
Milk contracts are flat which suggests no big moves in the auction results today. However there is a (mostly seasonal) rebound of prices in the US.
NZD is less closely following milk of late, but is still able to react to surprises.
source: Bloomberg, XTB
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