NZD: New Zealand Dollar climbs upwards
At the Forex currency market the New Zealand Dollar rateis traded upward on Thursday, reflecting overall optimistic sentiment whichprevails in the global capital market.
Forex forecast: MACD indicator for the pairNZD/USD is in the negative area, and started sideways movement, not giving aclear signal. Stochastic Oscillator is in the neutral zone and is moving in thesame direction, not giving any signals either.
Forex recommendations: in case of breakdownat the level of 0.8080, the pair will go to 0.8090 and 0.8120. If upward breakdown does not takeplace, the pair will consolidate at the achieved levels.
At the meeting which ended latelast night, the Reserve Bank of New Zealand decided to leave interest rateunchanged at the level of 2.5%.
The RBNZ clarified that rate wasleft at the record-low level largely because of debt crisis in Europe and slowdown in inflation in New Zealand. According to the head of the regulator AlanBollard, there is no point to raise the rate considering existing economic andfinancial risks. However, Bollard admitted that "if global developmentswill slightly affect the economy of New Zealand, it is possible that increasingpressure on domestic resources will gradually force us to raise the rate"
According to average estimate ofthe economists, interviewed by Bloomberg, the rate of the RBNZ is not going tobe changed until Q2 of 2012.
According to Fitch economists, currentaccount surplus in New Zealand will expand in 1012 and amount to 4.9%, in2013-5.5%. At the same time net level of foreign debt of New Zealand is abovethe level corresponding to its ranking. Finance Ministry of the country notedthat rating agencies in the world are too cautious about debt problems and itis still unknown whether the similar actions should be expected from otherplayers in the ranking sector. Earlier the head of the Reserve Bank of NewZealand said that probably financing of the banks in the country can become aproblem in 1012. According to Bollard banking system of New Zealand is in abetter state now than in 2008; however risks from Europe and the U.S. are stillthere. He also believes that the rate of NZD is still overvalued.
Prior statistics showed that GDP in NewZealand increased by 0.1% q/q (+1.5% y/y) in Q2 against +0.9% q/q (+1.6% y/y)in Q1. Commodity prices ANZ in New Zealand fell by 1.3% m/m in Septemberagainst -1.2% m/m. It is obvious that economy of the country, which is focusedon exports, suffers from significant external impact: we are speaking hereabout global reduction in demand all over the world. Therefore, economy of NewZealand has actually fallen into stagnation: GDP almost stopped growing in thelast quarter, which only proves that the decision of the RBNZ not to change thelevels of the interest rate was logical. The report disappointed market andcurrently it is quite possible that regulator will keep interest rates at thislevel for a long time, at least until the end of spring 2012. As it was madepublic earlier, house prices QV in New Zealand increased by 0.7% y/y inSeptember against the rise of 0.1% y/y in August. Meanwhile, the AUD is closelymonitoring the situation in China, since potential trade war between China andthe USA does not look promising to high-yielding currencies.
