New Zealand Dollar is the lows of September at the end of the week

At the Forex currency market the New Zealand Dollar rate remains under strong pressure at the end of the week, descending to the lows of September.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area and is giving a sell signal. Stochastic Oscillator remains in the oversold zone maintaining a sell signal.

Forex recommendations: in case of breakdown at the level of 0.7580, the pair will go to 0.7570 and 0.7550. If downward breakdown does not take place, the pair will consolidate at the achieved levels.

Mass media informed today that obviously market incorporates into risks a possibility of rate lowering by the Reserve Bank of New Zealand which will follow Australia’s trend.

Based on the economic realities it will be difficult for the RBNZ to decrease the rate, since regulator pursues quite aggressive monetary policy.

According to previous data, GDP in New Zealand rose 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. Thus New Zealand economy is actually in the state of stagnation. GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report 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.

It became known this week that volume of retail sales in New Zealand increased by 2.2% q/q in Q3 against preliminary level of growth of 1.0%. In addition, activity index in the service sector BNZ decreased to 50.6 points in October against preliminary level of 52.9 points.

Statistics is still mixed which it the reflection of strong impact of the developments both in Europe and in China. According to economists from Fitch, current account surplus in New Zealand will expand in 1012 and   amount to 4.9%, in 2013-5.5%. At  the same time, net level of foreign debt of New Zealand is above the level corresponding to its ranking. These have been the key in the issue of lowering of the rating. Finance Ministry of the country noted that rating agencies in the world are too cautious about debt problems and it is still unknown whether the similar actions should be expected from other players in the ranking sector.