NZD: New Zealand Dollar continues to grow despite external background

At the Forex currency market the New Zealand Dollar rate keeps on growing today, continuing the trend which started last week.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is in close proximity to the signal line, being ready to go through it from top to bottom and giving a pair sell signal. Stochastic Oscillator continues to give a pair buy signal today.

Forex recommendations: if investors’ current sentiment is maintained the pair will go to 0.7660 and 0.7710.

The New Zealand data released on Friday was multidirectional: index of industrial activity rose to the level of 53.7 in January against 53.2 for 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 last week that strong domestic currency does not support national economy, and consequently economy does not look quite competitive.

The data on the business confidence NAB for January was released last week: index demonstrated growth rate to 4 points against the decline by 3 points in December. Index of business conditions reduced to 6 points in the first month of the year against the previous value of 6. In addition, the data on the houses prices in January became known, which showed reduction by 1.5% y/y against -0.9% y/y in December.

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. However, the regulator will keep the rate at the low levels until the situation in the economy regains confidence and the recovery process becomes stable. As for the internal economy of New Zealand, economic activity in the second half of 2010 turned out weaker than the forecast and the reduction of expenditure in the retail sector in QIV is possible.

 

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