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• Rouble is losing positions again in pairing with USD and EUR [11/10/2011]
• NZD: New Zealand Dollar is descending [11/10/2011]
• AUD: sales of Australian Dollar do not subside [11/10/2011]
• JPY: Japanese Yen remains in the narrow trade range [11/10/2011]

NZD: Growth of New Zealand Dollar can be interrupted

At the Forex currency market the New Zealand rate growth continues on Tuesday, however, according to technical signals it can be limited.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and it is going down, giving a pair sell signal. Stochastic Oscillator has left oversold zone and is giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7490 the pair will go to 0.7525 and 0.7580. If the pair break down the level of 0.7435, traders’ targets will be the levels of 0.7400 and 0.7350.

As in case with the Australian Dollar, the NZD rate has been affected by the developments on the Korea peninsula. It became known on Monday that that South Korea began shooting near the island of Yeonpyeong. According to the press, volleys of guns have been heard there. We would remind that DPRK has repeatedly stressed that if South Korea would conduct military exercise on Yeonpyeong, the country would open fire on the island as “self -defence”. However, as soon as North Korea stressed that it will not react to provocation, the AUD started to rise. For the NZD the effect was not too strong, however level of purchase has reduced.

Otherwise the situation in New Zealand has remained unchanged.
Interest rate of the Reserve Bank of New Zealand is now at the level of 3.0% per annum. Commenting the last RBNZ meeting the regulator noted that the rate of the monetary policy tightening is expected to be moderate in the next two years, since the earthquake which happened in the country recently (and which was the strongest over the last 80 years) had a significant impact on the state of the national economy.
According to the head of the RBNZ Mr. Bollard: “The most reasonable at the moment will be to keep rates low until the moment when economic recovery becomes steadier and inflationary pressures will start to demonstrate sings of consolidation. In the next two years interest rate will rise in a more moderate pace than it had been expected earlier”.

We would remind that last week Ministry of Finance brought down economic growth forecast for the current and the next fiscal years. In particular, estimate of GDP growth for the next fiscal year which starts on 1 June was brought down to 2.2% against the previous target level of 3.2%. In 2012 monetary politicians expect economic growth to 3.4%; however later, in 1015, economic growth in New Zealand will slow down again to - 2.7%
In addition, it is assumed that there will be a budget deficit in the country, which is predicted to increase from the current 14.1% of GDP to 28.5% of GDP by June 2015.

 

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