NZD: New Zealand Dollar continues to tend downward

The New Zealand rate continues to be traded downward at the Forex currency market on Thursday after the release of weak statistics this morning.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, however continues to move along the signal line, preventing from forming a clear signal. Stochastic Oscillator is giving a pair sell signal, being in the neutral zone.

Forex recommendations: in current investors’ sentiment will be maintained, traders’ targets will become the levels of 0.7670 and 0.7635.

As it became known today, unemployment rate in New Zealand rose to 6.8% in QIV, 2010 against the previous level of 6.4% in QIII while economists expected the growth of 6.5%.

At the same time employment rate of the population in New Zealand fell by 0.5% in QIV (-11 thousand jobs) against the forecast of growth by 0.2%.

Thus, sales of the NZD are well-founded: the recent weak statistics constitute a serious threat to the unsteady recovering process of the New Zealand economy which started to gain momentum in QIII. It seems that companies in New Zealand do not trust the optimism of the government and do not rush to expand staff.

We would remind that at the meeting which was held at the end of January, the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will be sequentially increased 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 spending in the retail sector in QIV is not ruled out.

 

 
 

[More]