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The New Zealand Dollar rate finishes the week downward at the Forex currency market – in addition to the external background that leaves to chance for buyers rating agencies interfered in the currency trade.

 

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area and goes down, giving a sell signal; volumes are rising. Stochastic Oscillator is falling in the neutral zone, giving the same signal.

 

Forex recommendations: in case of breakdown at the level of 0.7630, the pair will show a correctional movement to 0.7620 and 0.7600.

 

According to the information released at the end of the week, Fitch Ratings downgraded New Zealand to ?? from ??+, outlook “stable”.

 

Market’s reaction to the news was immediate: the NZD found itself in a selloff.

 

According to Fitch economists, current account deficit in 2012 in New Zealand will only widen to 4,9%, in 2013 – to 5,5%. At the same time external debt level exceeds the upper limit for the country’s current rating. These points played the main role in rating downgrade.

 

As noted by the Finance Ministry of the country, rating agencies pay too much attention to the debt problems, and the uncertainty about the same actions to be taken by other rating agencies preserves.

 

The RBNZ head said the day before that the financing of the country’s banking sector might become a problem in 2012. According to Mr. Bollard, the New Zealand banking system now feels a great deal better than in 2008, but risks from Europe and USA are increasing. Still the NZD is too expensive, in his opinion.

 

The statistics released before turned out to be mixed. Consumer confidence index ANZ in New Zealand fell to 112.6 points in September against the level of 113.3 points in August. It is clear that macro-economy does not provide any support to the NZD. In addition, it became known that purchasing manager index PMI BNZ in New Zealand fell to 52.9 points in August against the previous level of 53.2 points. The index had been declining for the third consecutive month which demonstrates slowdown in the sector.

 

It became known last week that GDP in New Zealand increased by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1.

 

Therefore, there is actually stagnation in the economy of New Zealand: GDP has almost stopped rising last quarter, which proves that decision of the RBNZ do not change interest rate was logical. The report has disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.