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At the Forex currency market the New Zealand Dollar rate continues to decline on Friday; however volume of sale is not very big at the moment.  Apparently, investors are taking a break in advance of the coming weekend to organize their thoughts and determine the medium term trading channel.

Forex forecast: MACD indicator for the pair NZD/USD is ready to break through the signal line from top to bottom and maintains a sell signal. Stochastic Oscillator is going down in the neutral zone and is giving a sell signal, approaching oversold zone.

Forex recommendations: in case of breakdown at the level of 0.7750, the pair will go to 0.7740 and 0.7720. If downward breakdown does not take place, the pair will consolidate at the achieved levels. It became known today that home sales REINZ in New Zealand declined by 0.3% m/m (+28.3% y/y) in October. This data was neutral for the NZD. Consumer confidence index in New Zealand amounted to 109.0 points in November against 112.2 points for the previous period. This data is another indication of the slowdown in the economy of New Zealand.

According to previous data, GDP in New Zealand rose by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1. Thus New Zealand economy is actually in the state of stagnation. GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012. As it was made public earlier, house prices QV in New Zealand increased by 0.7% y/y in September against the rise of 0.1% y/y in August.

At the meeting in the end of October, the Reserve Bank of New Zealand decided to leave interest rate unchanged at the level of 2.5%. The RBNZ clarified that rate was left at the record-low level largely, because of debt crisis in Europe and slow down in inflation in New Zealand. According to the head of the regulator Alan Bollard, there is no point to raise the rate considering existing economic and financial risks. However, Bollard admitted that “if global developments will slightly affect the economy of New Zealand, it is possible that increasing pressure on domestic resources will gradually force us to raise the rate”

According to Fitch economists, current account surplus in New Zealand will expand in 1012 and   amount to 4.9%, in 2013-5.5%. At  the same time net level of foreign debt of New Zealand is above the level corresponding to its ranking. Finance Ministry of the country noted that rating agencies in the world are too cautious about debt problems and it is still unknown whether the similar actions should be expected from other players in the ranking sector.

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