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At the Forex currency marketthe New Zealand Dollar rate is traded upward on Thursday morning, continuingthe trend of this week.

Forex forecast: MACD indicatoris in the positive area for the pair NZD/USD, goes down, giving a sell signal,however volume are decreasing. Stochastic Oscillator goes up in the neutralzone, giving a buy signal and approaching overbought zone.

Forex recommendations: in caseof breakdown at the level of 0.8175, the pair will go to 0.8190 and0.8230.

This week data showed thatcurrent account balance amounted to -NZD$0.097 billion in Q1 against theforecast of -NZD$0.900 billion. Note that ratio of the deficit to GDP totaledto -4.3% in Q1 this year against the forecast of -4.4% and the level of -2.3%in Q4 last year.

In addition, it also becameknown that credit card spending increased by 0.6% m/m (+5.1% y/y) in Mayagainst the growth of 1.6% m/m in April. Note: that budget deficit in NewZealand amounted to NZ$10.17 billion within 9 months, as of 31 March, which hadbeen 15% higher than expected by economists. Terms of trade index in NewZealand rose to the 37-year highs in QI, demonstrating growth by 0.9% (+6.8%y/y). It could be one of the indications that New Zealand economy is recoveringas it reflects changes in prices for exports and imports. We would like topoint that the index is strongly correlated with the index of living standardin the country which is a positive sign.

It became known last week, thatconsumer confidence index Westpac in New Zealand increased to 112.0 points inQ2 against the level of 97.7 points in Q1. Consumer confidence ANZ increased to112.5 points in June against the preliminary level of 103.3 points. Inaddition, volume of retail sales in New Zealand rose for the first time in thelast 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, excludinginflation.

Earlier, the Reserve Bank ofNew Zealand decided to keep interest rate unchanged at the minimum of 2.50% perannum, since it is going to continue its work on improvement in economicsystem. According to the head of the RBNZ, NZD has been overvalued because ofhigh export prices for raw materials, therefore, national currency rate, whichhas increased over the last two months, has adverse impact on the rebalancingof the economy in New Zealand. Bollard expressed confidence that decline of theNZD will be gradual because currency intervention will not be able to changethe trend.

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