NZD: New Zealand Dollar continues to recover

At the Forex currency market the New Zealand Dollar rate continues to recover on Friday after drastic fall this week.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to go down, confirming a previous sell signal for the pair. Stochastic oscillator has come out of the oversold zone and started forming a pair buy signal.

Forex recommendations: if current external background is maintained and in case of breakdown at the level of 0.7500, buyers’ targets will be the level of 0.7520 and 0.7550. However, further sales of the New Zealand currency should not be excluded either.

Earthquake in the South of New Zealand this week has led the pair NZD/USD down by 2.5 figures just within one session, and still affects low consumer interest in the NZD 

The data on the business confidence NAB for January was released earlier: thus, 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.

The report of the Reserve Bank of New Zealand showed that two-year inflation forecasts remained unchanged in QI: +2.6%.

The data on New Zealand, released on Friday 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 last week that strong domestic currency did not support national economy, and consequently economy does not look quite competitive.

Knowing that in spite of the recent events, the economy of New Zealand is quite stable at the moment, current downfall can be considered as a good chance to buy a pair at the local lows.

 

[More]