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NZD: New Zealand Dollar is at the local highs

At the Forex currency market the New Zealand rate continues to be traded upward on Wednesday on the tide of investors’ overall positive sentiment at the global capital markets.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and continues to go up, giving a pair buy signal. Stochastic Oscillator remains in the overbought zone today, confirming a pair buy signal and creating conditions for the upcoming correction.

Forex recommendations: if current bullish sentiment will be maintained at the market and in case of breakdown at the level of 0.7825, which is a local high buyers’ targets will be the levels of 0.7850 and 0.7870.

In general the situation in the economy of New Zealand remains almost unchanged

We would remind that the meeting of the Reserve Bank of New Zealand was held at the end of January which made an expected decision to keep interest rate at the previous level of 3.0% per annum. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will be sequentially raised over the next two years. 

However, the regulator will keep the rate at the low levels until the situation in the economy regains confidence and the recovery process becomes stable. As for the internal economy of New Zealand, economic activity in the second half of 2010 turned out weaker than the forecast and the reduction of spending in the retail sector in QIV is not ruled out.

In other respects, the regulator adhered to his previous statements and outlook for the New Zealand economy has also remained unchanged.

Forecast of economic growth in New Zealand which was made public earlier, is not too optimistic.  Estimates 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%.  Note also, that, it is assumed also that country will have budget deficit, which is expected to rise from the current 14.1% of GDP to 28.5% of GDP by June 2015. According to the data released earlier, level of business sentiment in New Zealand rose to 8 points in QIV, as per NZIER estimates, against the previous level of 6 points. 

 
 

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