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At the Forex currency market the New Zealand Dollar rate is almost motionless in the middle of the week squeezed within the narrow range.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, however it goes down, giving a pair sell signal. Stochastic Oscillator rises in the neutral zone, giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7950/60 the pair will go to 0.7990. if the level of 0.7920 is exceeded, the target for decline will become the level of 0.7880.

It became known today that the house price index in New Zealand increased by 1.1% m/m in April, as per REINZ estimates against the forecast of growth by 0.5% m/m. In addition the agency reported that the level of house sales last month was -4.2% y/y against the level of -5.1% y/y in March. 

Yesterday’s macro- data showed that house prices fell by 1.9% m/m in April against the decline by 2.0% in March and credit cards expenses rose by 1.7% ?/? in April against the increase by 0.5% in March.

Therefore, real estate sector of New Zealand started to recover and it is a strong supportive factor for the economy.

We would remind that the Reserve Bank of Zealand left interest rate unchanged, at the level of 2.5% per annum. The head of the RBNZ Mr. Bollard stressed that interest rate is not supposed to be changed so far. Regulator pointed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy.

According to the official data, the outflow of population was the biggest in March over the past 10 years– migration figures will cause slow down in the NZD recovery process.

At the same time unemployment rate New Zealand fell to 6.6% in QI against the level of 6.8% in QIV, 2010. The forecast had been 6.7%. In addition the proportion of labor force increased to 68.7% against the previous level of 67.9%. Although indicators are favourable, ASB still believe that report is ambiguous: it is possible that the earthquake of February will have more serious impact on the economy than expected and it will have additional pressure on the labor market of New Zealand and will have an adverse affect on the prospects for the sector as a whole.

It is also worth noting that budget deficit in New Zealand amounted to NZ$10.17 billion for the 9 months by 31 March which was in average 15% higher than expected by economists. This fact provoked previous sales of the NZD.

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