NZD: New Zealand Dollar continues to strengthen

The New Zealand Dollar rate is traded upward at the Forex currency market on Tuesday morning, continuing the rise amid investors’ interest to risk, which is preserved this week.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD, however it tends to grow, giving ground for a buy signal. Stochastic Oscillator has come into overbought zone and maintains a buy signal.

Forex recommendations: in case of breakdown at the level of 0.8520, the pair will go to 0.8540 and 0.8560. If upward breakdown does not take place, the pair will consolidate close to the current levels.

It became known on Tuesday that permits to construct in New Zealand increased by 13.0% in July against the fall of 1.3% in June.

It is too early to speak about tendency; however current results are quite good.

According to the released data, consumer confidence ANZ in New Zealand increased to 114.4 points in August against preliminary level of 109.4 points. CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is one more positive characteristic of the economic status in New Zealand. It is worth noting that permits for construction in New Zealand fell by 1.4% m/m in June against the forecast of +3.0%.

Last meeting of the Reserve Bank of New Zealand did not bring any surprises: it was decided to leave interest rate at the previous level of 2.5% per annum. In the follow-up comments the RBNZ said that monetary policy tightening which has been planned for the nearest future is aimed to duly curb the rise in prices in the country. As the head of the Bank, Mr. Bollard noted:”World financial risks have begun to fade out and economic growth continues to accelerate pace; therefore, there is no point to maintain the rate at the current low level any further.”

It became known earlier that retail sales in New Zealand increased by 0.9% q/q in Q2 against the forecast of growth by 0.7% on quarterly basis. According to the details given in the report the growth is attributed to the sale of motor spare parts, electrical goods and medicine.

As it was made public earlier unemployment rate in New Zealand amounted to 6.5% in Q2 against revised similar value in Q1. Employment rate in New Zealand has not changed on quarterly basis in Q2, showing growth by 2.0% y/y, to 2.214 million. In general the data agreed with the economists’ forecast, while unemployment rate had been even below the consensus forecast of 6.6%.

As long as the USD remains under pressure caused by the U.S. FR position declared by regulator Bernanke last Friday, investors will regain from previous sales.

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