NZ Trade Balance Falls into Deficit in June; Exports to China Rise

New Zealand's monthly merchandise trade balance fell into deficit for the first time since December last month, however, exports to China rose for the first time since August, and exports rose on an annual basis for the first time in nearly a year.

The monthly trade balance went from a revised surplus of $371 million in May to a shortfall of $60 million last month, according to Statistics New Zealand data released Friday, coming in worse than analysts' predicted $100 million surplus.

New Zealand's currency has been a focal point among policymakers in recent years, with its relatively high value causing grief in the export economy.

In particular, dairy farmers have struggled to cope with the high exchange rate at the same time that dairy prices have tumbled.

In recent weeks the currency has been trading at a 5-year low against the US dollar, and around a 3-year low on a trade-weighted basis. On Thursday the RBNZ signaled that it is more comfortable with this level of the currency, but indicated that a further depreciation is needed to help exporters.