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At the Forex currency market the New Zealand Dollar rate is traded without fundamental direction on Wednesday still remaining under pressure from traders.
 
Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to descend giving a pair sell signal. Stochastic Oscillator also goes down today, being in the neutral zone and confirming a previous sell signal.
 
Forex recommendations: in case of breakdown at the level of 0.7300 bears’ targets will be the levels of 0.7280 and 0.7250.

 

Today’s statistics showed that level of consumer confidence in New Zealand decreased to 101.4 in March against the level of 108.1 points in February. This was another factor in favour of the AUD sales.

The New Zealand Dollar still looks extremely weak after the collapse last week and developments in Japan, as well as slowdown of economy in China will prevent currency’s recovery, even partial.
 

At the meeting last week the Reserve Bank of New Zealand decided to decrease interest rate by 50 basis points, to the level of 2.50% per annum. Investors, who had predicted possible reduction of the indicator, had estimated the decrease by 25 basis points.

Previous sales of the NZD were triggered by the view of the country’s Prime Minister John Key, who said in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate from the current 3%. Investors interpreted his opinion as a call to action and pressed the pair through to the local lows. The politician does not rule out that effect of the earthquake in the South of New Zealand in February can cause the rollback of the national economy into the state of recession.

Apparently, the RBNZ will start a new phase of monetary policy tightening soon.

We would remind that at the last meeting in January the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. The Central Bank showed commitment to maintain monetary policy unchanged. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will gradually increase over the next two years. Amid the latest macro-economic news such plans seem comic.