NZD: Growth of New Zealand Dollar is supported by external background

At the Forex currency market the New Zealand Dollar rate continues to grow for the fourth consecutive session supported by the tranquility at the world capital markets and consolidation of oil prices.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and is moving along the signal line, preventing from forming a clear signal. Stochastic Oscillator is in the overbought zone today, not giving a signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7550 the pair will go to 0.7580 and 0.7600. If the level of 0.7505 is broken down, traders’ targets will be the levels of 0.7470 and 0.7450.

Market in New Zealand is closed today, therefore dynamics of trading session for the NZD/USD is similar to those of GBP/USD and AUD/USD   where trend is set by the external background.Interest rate of the Reserve Bank of New Zealand is now at the level of 3.0% per annum. Commenting the last RBNZ meeting the regulator noted that the rate of the monetary policy tightening is expected to be moderate in the next two years, since the earthquake which happened in the country recently (and which was the strongest over the last 80 years) had a significant impact on the state of the national economy.

According to the head of the RBNZ Mr. Bollard: “The most reasonable at the moment will be to keep rates low until the moment when economic recovery becomes steadier and inflationary pressures will start to demonstrate sings of consolidation. In the next two years interest rate will rise in a more moderate pace than it had been expected earlier”.

Earlier Ministry of Finance brought down economic growth forecast for the current and the next fiscal years. In particular, estimate of GDP growth for the next fiscal year which starts on 1 June was brought down to 2.2% against the previous target level of 3.2%. In 2012 monetary politicians expect economic growth to 3.4%; however later, in 1015, economic growth in New Zealand will slow down again to - 2.7%
In addition, it is assumed that there will be a budget deficit in the country, which is predicted to increase from the current 14.1% of GDP to 28.5% of GDP by June 2015.

 
 

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