NZD: New Zealand Dollar experiences correction from highs

At the Forex currency market the New Zealand Dollar rate trades downward on Thursday amid technical rollback from the high at 0.7806.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is rising, maintaining a buy signal. Stochastic Oscillator remains in the overbought zone today, giving the same signal.

Forex recommendations: after technical correction buyers’ targets may become the levels of 0.7806 and 0.7820.

Today the situation in the national economy remains unchanged.

According to NZ monetary officials, there is no need in reducing the key interest rate again as the situation in the national economy looks rather stable.
Data released on trade balance last week turned out to be positive for the first time in 8 months. The main catalysts for this were high commodity prices and an increase in export levels of wood and dried milk. Export levels increased by 17% y/y in February, import – by 23% y/y to the level of NZ$3.86 bln. Export accounts for about 30% of NZ GDP and an increase in it will have a positive effect on the national economy.

Balance of current account in New Zealand decreased to -NZ$3.5 billion against the value of -NZ$1.77 billion in QIII. The balance is most likely decreased due to the seasonal factors and we surely can see improvement in the situation.

As it became known the day before, the 1q level of NBNZ Business Confidence in New Zealand, according to NIESR, decreased by 27% against the 4q level of +8 points.

Thereby the first 1q data is being published, yet rather weak. Still kiwi ignores the statistics. March data is not impressive: the level of NBNZ business outlook in New Zealand declined to -8.7 points in March against the level of 34.5 points in February. It is difficult to judge on the reasons of such a rollback, and one should wait for the next data to judge on the trend.

 

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