NZD: Decline of New Zealand Dollar has been continued

At the Forex currency market the New Zealand Dollar rate continues to decline on Monday under the pressure of the tropical hurricane “Yassi”” and due to the overall reduction of the oil global prices.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is moving along the signal line, preventing from forming a clear signal. Stochastic oscillator has reached oversold zone today, also giving a pair sell signal.

Forex recommendations: if current sentiment will be maintained at the market; traders of the pair will have levels 0.7650 and 0.7610 as targets. If downward breakdown will not take place, the pair will consolidate close to the current levels.

As it became known last week that unemployment rate in New Zealand rose to 6.8% in QIV, 2010 against the previous level of 6.4% in QIII while economists expected the growth of 6.5%. At the same time employment rate of the population in New Zealand fell by 0.5% in QIV (-11 thousand jobs) against the forecast of growth by 0.2%.

That was the major catalyst for the NZD sales, which has been intensified by the weather factor later.

We would remind that at the meeting which was held at the end of January, the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will be sequentially increased over the next two years. 

However, the regulator will keep the rate at the low levels until the situation in the economy regains confidence and the recovery process becomes 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.

 

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