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• Rouble is losing positions again in pairing with USD and EUR [11/10/2011]
• NZD: New Zealand Dollar is descending [11/10/2011]
• AUD: sales of Australian Dollar do not subside [11/10/2011]
• JPY: Japanese Yen remains in the narrow trade range [11/10/2011]

NZD: New Zealand Dollar marks time

At the Forex currency market the New Zealand Dollar does not make much progress on Thursday, following four sessions of growth.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD; however it is moving along the signal line, not giving a clear signal. Stochastic oscillator is giving a pair buy signal today, being in the neutral zone.

Forex recommendations: if buyers’ interest to the pair will increase and in case of breakdown at the level of 0.7730 the pair will go to 0.7750 and 0.7790. If the breakdown upward will not take place, the pair will continue to consolidate close to the current levels.

On Wednesday night the meeting of the Reserve Bank of New Zealand finished; an expected decision to keep interest rate at the previous level of 3.0% per annum was made at the meeting. In the follow-up comments the head of the RBNZ, Bollard stressed that the rates will be raised sequentially over the next two years. 

However, the regulator will keep the rate at the low levels as long as the situation in the economy regains confidence and the recovery process will become stable. As for the internal economy of New Zealand, economic activity in the second half of 2010 turned out weaker than the forecast and the reduction of spending in the retail sector in QIV is not ruled out.

In other respects, the regulator adhered to his previous statements and the outlook for the New Zealand economy has also remained unchanged.

Ministry of Finance takes a dark view of the economic outlooks of the country; therefore, earlier they downgraded the forecast of economic growth for the current and the next fiscal years. In particular, estimate of GDP growth for the next fiscal year which starts on 1 June was brought down to 2.2% against the previous target level of 3.2%. In 2012 monetary politicians expect economic growth to 3.4%; however later, in 1015, economic growth in New Zealand will slow down again to - 2.7%.  Note also, that budget deficit is assumed in the country, which is expected to increase from the current 14.1% of GDP to 28.5% of GDP by June 2015.

According to the earlier data the level of business sentiment in New Zealand in QIV rose to 8 points, as per NZIER estimates, against the previous level of 6 points. In general, it is a positive indicator for the NZD and the economy.

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