NZD: New Zealand Dollar are tending upwards

At the Forex currency market on Monday the New Zealand Dollar rate continues to strengthen, regaining from the previous decline.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD; however it goes down, giving a pair sell signal. Stochastic Oscillator pushed away from the oversold zone and resumed growth, forming a buy signal.

Forex recommendations: Correction can help the pair reach 0.7950/60, however when “bears are back at the market the target of the sale will be the level of 0.7895.

According to official data, the outflow of population was the biggest in March over the past 10 years– migration figures will cause slow down in the NZD recovery process.

At the same time unemployment rate New Zealand fell to 6.6% in QI against the level of 6.8% in QIV, 2010. The forecast had been 6.7%. In addition the proportion of labor force increased to 68.7% against the previous level of 67.9%. Although indicators are favourable, ASB still believe that report is ambiguous: it is possible that the earthquake of February will have more serious impact on the economy than expected and it will have additional pressure on the labor market of New Zealand and will have an adverse affect on the prospects for the sector as a whole. 

According to the decision of the Reserve Bank of Zealand, made at the last meeting, interest rate was left unchanged, at the level of 2.5% per annum. The head of the RBNZ Mr. Bollard stressed that interest rate is not supposed to be changed so far. Regulator pointed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy.

Macro-statistics released this week showed that construction permits in New Zealand rose by 2.2% m/m in March against preliminary forecast of decline by 9.7% m/m.

It became known last week that Monetary Authorities of New Zealand decided to expand program to purchase assets up to NZD20 billion. The data released at the end of last week showed that trade surplus in New Zealand rose to NZD464 billion in March against the level of NZD194 billion in February. The level of trade surplus was substantially above the forecast of 200 billion, which is a positive indication for the economy. Export amounted to NZD4.53 billion last month against the forecast of 4.20 billion and imports totaled 4.07 billion versus to the expected 3.90 billion.

 

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