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At the Forex currency market the New Zealand dollar rate continues to go down at the end of the week.

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

Forex recommendations: in case of breakdown at the level of 0.8110 the pair will go to 0.8090 and 0.8070. If downward breakdown does not take place the pair will consolidate close to the current levels.

It became known today, that construction permits in New Zealand fell by 1.6% m/m in April against the forecast of growth by 0.5%. 

Agency Fitch stated that New Zealand economy has demonstrated stabilization of the budget; however it is not sufficient yet to revise the rating outlook of the country from the current “negative”. Moody’s noted that authorities of New Zealand have been doing a good job, and take every step to bring economy to its normal state.

Note: that budget deficit in New Zealand amounted to NZ$10.17 billion within 9 months, as of 31 March, which had been 15% higher than expected by economists.

The data released earlier was mixed: 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 and credit cards costs rose by 1.7% m/m in April against the growth 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. According to REINZ estimates house prices index in New Zealand increased by 1.1% m/m in April 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. 

It is also worth noting that producer price at entrance into QI rose by 2.2% q/q, while the forecast of growth had been 0.6% q/q, producer prices at exit increased by 1.7% q/q with the forecast of 0.5% q/q. 

As it became known earlier, terms of trade index in New Zealand rose to the 37-year high in QI, demonstrating growth by 0.9% (+6.8% y/y). It could be one of the indications that New Zealand economy is recovering as it reflects changes in prices for exports and imports.

We would like to point that the index is strongly correlated with the index of living standard in the country which is a positive sign. 

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