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NZD: New Zealand Dollar continues to decline
The New Zealand Dollar started to decline again at the Forex currency market on Monday, amid withdrawal of traders from risky positions.
Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to decline, giving a pair sell signal. Stochastic Oscillator goes up in the neutral zone today 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 0.7400 the pair will go to 0.7420 and 0.7450. If the level of 0.7350 is exceeded, traders will become interested in the levels of 0.7320 and 0.7300.
The New Zealand Dollar still looks extremely weak after the collapse last week and developments in Japan as well as slow down of economy in China will prevent the currency from regaining even partially.
At the last meeting last week the Reserve Bank of New Zealand decided to decrease interest rate by 50 basis points, to 2.50% per annum. Investors, who had predicted possible reduction of the indicator, ignored its decrease by 25 basis points.
Previous sales of the NZD were caused by the view of the country’s Prime Minister John Key, who said in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate from the current 3%; next meeting of the RBNZ is scheduled for 10 March. Politician does not rule out that effect of the earthquake which took place in the South of New Zealand in February can contribute to the rollback of the national economy into the state of recession.
We would remind that at the last meeting in January the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. The Central Bank showed adherence to maintain monetary policy unchanged. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will sequentially increase over the next two years.
Apparently, the RBNZ will start a new phase of monetary policy tightening soon.
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