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At the Forex currency market the New Zealand Dollar rate is under intense attention of sellers which is understandable: market is not prepared to start basic purchases, given the fact that external background is still tense and investors are awaiting the speech of Bernanke in Jackson Hole on Friday and his reference about QE3.

Forex forecast: MACD indicator for the pair NZD/USD has broken through signal line from top to bottom and is giving a sell signal. It continues to go further down. Stochastic Oscillator has pushed away from oversold zone, which it did not come into, and goes up in the neutral zone, giving a buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8300, the pair will go to 0.8320 and 0.8350. If upward breakdown does not take place, the pair will consolidate close to the current levels.

The data released in the middle of the week demonstrated that export in New Zealand was at the level of NZ$3.7 billion in July. Surplus of trade balance fell in July and amounted to +NZ$129 million versus the level of +NZ$197 million in June. Note that exports increased by 4.5% in Q2, to NZ$12.2 billion; imports fell by 1%, to the level of NZ$11.8 billion. Exports to China and Australia have been reducing gradually, up to +1.3% y/y (+24.2% y/y earlier) and 1.2% y/y (previously: +4.7% y/y) respectively.

A 2-year inflation forecast released yesterday showed that expectations at the level of 2.9% are in Q3 against the previous forecast of 3.0%. Although the forecast was below previous expectations, it did not have a negative impact on the rate of the NZD.

It became known earlier that unemployment rate in New Zealand amounted to 6.5% in Q2 against revised similar value in Q1. Employment rate in New Zealand has not changed on quarterly basis in Q2, showing growth by 2.0% y/y, to 2.214 million. In general the data agreed with the economists’ forecast, unemployment rate had been even below consensus forecast of 6.6%. However, this did not prevent sales of the NZD.

 Last meeting of the Reserve Bank of New Zealand did not bring any surprises: it decided to leave interest rate at the previous level of 2.5% per annum. In the follow-up comments the RBNZ said that monetary policy tightening which has been planned for the nearest future is aimed to duly curb the rise in prices in the country. As the head of the Bank, Mr. Bollard noted:”World financial risks have begun to fade out and economic growth continues to accelerate pace; therefore, there is no point to maintain the rate at the current low level any further.”

According to the released data, consumer confidence ANZ in New Zealand increased to 114.4 points in August against preliminary level of 109.4 points. CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is one more positive characteristic of the economic status in New Zealand. It is worth noting that permits for construction in New Zealand fell by 1.4% m/m in June against the forecast of +3.0%.

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