NZD: New Zealand Dollar continues to decline amid external negative factor

At the Forex currency market the New Zealand Dollar rate continues to move in the descending channel on Tuesday, being under the pressure of the negative external factor and also affected by the fall of the Euro bellow 1.30.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD; and it is moving along the signal line not giving a clear signal. Stochastic Oscillator does not give a clear signal either, being in the oversold area.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7475 the pair will go to 0.7500 and 0.7550. If the level of 0.7400 is exceeded, traders’ targets will become the levels of 0.7350 and 0.7310.

It became known today that money supply M3 in New Zealand rose by 1.8% in October against the fall by 2.0% in September.

Catalysts for the pair are exactly the same as that of the Australian Dollar. Difficult situation in the conflict area between South and North Koreas had been worsened due to the military exercises conducted at the weekend.

As it was reported earlier unemployment rate in New Zealand decreased to 6.4% in QIII against the previous level of 6.7% in QII. At the same time the change in the employment rate in QIII amounted to +1% against expectations of +0.5%.

Reserve Bank of New Zealand continues to adhere to the policy of non-intervention and peace – the regulator is convinced that strong NZD prevents better balanced national economy, and recent research demonstrates that pace recovery in the domestic economy has slowed down. In addition the regulator stressed that banking system in New Zealand is in good state, while real estate sales is reducing, which can be a signal for a new rebound in the sector.   

In the mid of November the head of the Reserve bank of New Zealand Mr. Bollard emphasized that growth in NZD can affect future prospects of the interest rate increase and the New Zealand Dollar rate has been slightly overvalued for quite a long time. Monetary politician also expressed his opinion that currency rates in a number of countries are in such state now that they are not able to prevent elimination of unbalance at the currency market. According to him minimization of economic stimulation measures bears risks to the global economy. However the last US FR decision to start a new stage of stimulation had a positive effect at the global capital markets, although it puts pressure on the currency rates in the developing countries.

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