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The New Zealand Dollar rate continues to show an intention to move away from local lows at the Forex currency market on Wednesday. Still the currency buying volumes in spite of attractive levels are practically unapparent: the external background is gloomy and risk aversion prevails.

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

Forex recommendations: in case of breakup at the level of 0.7620, the pair will go to 0.7635 and 0.7650. One should note that aggressive sellers may easily return to the pair.

Macroeconomic situation in New Zealand remains practically unchanged. Investors are likely to take interest in September data that will probably show economy’s cooling amid still impressive external impact.

It became known before 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. ANZ Commodities prices in New Zealand totaled -1,3% m/m in September against -1,2% m/m. It is obvious that export-oriented economy is seriously affected by the external background showing a global slump in demand. This can be proved by observers’ reaction: according to the information released last 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 slumping in a downward channel. 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.

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 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. 

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