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At the Forex currency market the New Zealand rate is traded slightly upward on Friday, the currency that is too oversold is trying to regain losses caused by pressure of “bears” this week.

Forex forecast: MACD indicator for the pair NZD/USD has shifted into sideways movement in the negative area and is not giving a clear signal. Stochastic Oscillator has come out of the oversold zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.7615 the pair will go to 0.7620 and 0.7630.

Macro-economic background in New Zealand is neutral.

Only at the end of the week the fact that the NZD is oversold became favourable for the currency; as soon as external background stabilized players begun purchases at the attractive levels, although only as a part of rebound. 

Decision of the Reserve Bank of New Zealand last week was of no surprise to anyone. Interest rate was left at the level of 2.5% per annum, since its level has already been revised last month. In addition, the data released on Thursday showed that activity in the manufacturing industry fell by 1.4% q/q and remained unchanged on annual basis in Q3, against the fall of 0.7% in Q2, which is the consequence of slump in the world economy.

It became known earlier that trade balance in New Zealand was at the level of –NZ$282 million in October against the level of NZ$784 million in September. The index remained in deficit last month although higher than the forecasts of economists. Volumes of export increased by 5.3% (NZ$3.9 billion) on annual basis in October and imports rose by 8.9% y/y due to demand for industrial production. Consumer confidence index ANZ in New Zealand declined to 108.4 points in December against 109.0 points earlier. The NZD regained from this information due to pressure from sellers.

GDP 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. Permits to construct in New Zealand increased sharply by 10,0% in October against the fall of 1.3% y/y in September. 

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