NZD: New Zealand Dollar awaits decision on interest rate

At the Forex currency market the New Zealand rate continues to grow slightly as part of the rebound after the previous fall into the area of local lows.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to go down, giving a pair sell signal. Stochastic oscillator continues to go up in the neutral zone and is giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 0.7425 the pair will go to 0.7460 and 0.7500. However vigilant shall be preserved, as the meeting of the Reserve Bank of New Zealand will start at 23:00 Moscow time.

Investors will be very interested in the reaction of the RBNZ on macro-economic data and comments.
Previous sales of the NZD were caused by the view of the country’s Prime Minister John Key, who said in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate from the current 3%; next meeting of the RBNZ is scheduled for 10 March. Politician does not rule out that effect of the earthquake which took place in the South of New Zealand in February can contribute to the rollback of the national economy into the state of recession.

We would remind that at the last meeting in January the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. The Central Bank showed adherence to maintain monetary policy unchanged. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will sequentially increase over the next two years.

Statistics released in February was mixed: index of industrial activity rose to the level of 53.7 in January against 53.2 in the previous period; producer prices at exit/entrance for quarter IV: +0.9%/+0.2% respectively; consumer confidence index ANZ increased to 108.2 in February against 117.1 in January. In addition, Finance Minister of New Zealand said a week earlier that strong domestic currency did not support national economy, and consequently economy looks not quite competitive.

Thus, there are strong speculations at the market regarding the rate of the NZRB, which puts pressure on the currency.
 
 

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