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The New Zealand Dollar rate shows weak signs of increase at the Forex currency market on

Thursday, still there are no catalysts for traders to start buying after yesterday’s selloff.

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 rising in the neutral zone, giving a weak buy signal.

Forex recommendations: in case of breakup at the level of 0.7790, the pair will show a correctional movement to 0.7820 and 0.7850.

The RBNZ head said this morning that the financing of the country’s banking sector may 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 the day 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. 

Levels of exports do not support economy of New Zealand: the index decreased by 0.5% last quarter, while the share of imports increased by 1.7%.

CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is worth noting that number of permits to construct in New Zealand decreased by 1.4% m/m in July against the forecast of +3.0%. Activity in the construction sector of Australia was at the level of - 6.6 q/q in Q2; which agreed with the revised data in Q1. 

In whole the main market driver is the external background and world financial markets’ investors’ sentiment.

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