Forex Blog
Blog-FX.Com

The New Zealand Dollar rate is traded downward at the Forex currency market on Friday, investors have recorded profit on positions at the end of the week, which became especially noticeable when the NZD had reached local peak this week.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and started to go up, giving a buy signal. Stochastic Oscillator remains in the oversold zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.82800, the pair will go to 0.83000 ? 0.8315. If upward breakdown does not take place, the pair will consolidate close to the current levels, and could step back to 0.8230, as part of correction.

It became known yesterday, that permits for construction in New Zealand increased by 2.2% m/m in May against the forecast of growth by 3.2%. Economic growth is still complicated in the country.

In other respects, macro-economic background in the country remains almost unchanged.

As it became known this week, trade balance in New Zealand was at the level of NZD$605 billion in May against the forecast of NZD$1000 billion. This is a negative data, because decline in the trade balance will indicate decline in the level of exports later, which will be the impact of cooling in Chinese economy.

Earlier, the Reserve Bank of New Zealand decided to keep interest rate unchanged at the minimum of 2.50% per annum, since it is going to continue its work on improvement in economic system. According to the head of the RBNZ, NZD has been overvalued because of high export prices for raw materials, therefore, national currency rate, which has increased over the last two months, has adverse impact on the rebalancing of the economy in New Zealand.

Bollard expressed confidence that decline of the NZD will be gradual because currency intervention will not be able to change the trend.
Consumer confidence index Westpac in New Zealand increased to 112.0 points in Q2 against the level of 97.7 points in Q1. Consumer confidence ANZ increased to 112.5 points in June against the preliminary level of 103.3 points. In addition, volume of retail sales in New Zealand rose for the first time in the last three quarters in Q1, which is a good sign of the economic recovery. Thus, indicator increased by 0.9% q/q which agreed with the forecast, excluding inflation.

The data of last week showed that current account balance amounted to -NZD$0.097 billion in Q1 against the forecast of -NZD$0.900 billion. Note that ratio of the deficit to GDP totaled to -4.3% in Q1 this year against the forecast of -4.4% and the level of -2.3% in Q4 last year. Index of trading conditions in Q1 increased to a 37 - year highs in Q1, demonstrating the growth of 0.9% on quarterly basis (+6.8% y/y), which could be one of the signs of economic recovery in New Zealand, as it reflects changes in prices for exports and imports.

Tags: