NZD: New Zealand Dollar falls lower and lower

At the Forex currency market the New Zealand Dollar is traded downward on Wednesday because investors are actively selling high-yielding currencies amid decreasing interest in risk.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is moving along the signal line, not giving a clear signal, although trading volumes are declining. Stochastic Oscillator goes down in the neutral zone today, giving a pair sell signal.

Forex recommendations: if bearish sentiments intensify in the pair and in case of breakdown at the level of 0.7930, the pair will go to 0.7900 and 0.7880.

According to the data released on Wednesday, construction permits in New Zealand rose by 2.2% m/m in March against preliminary forecast of reduction by 9.7% m/m. The NZD did not respond to the positive statistics because external sales are higher so far.

It became known on Tuesday that Monetary Authorities of New Zealand decided to expand program to  purchase assets up to NZD20 billion. The data released at the end of last week showed that trade surplus in New Zealand rose to NZD464 billion in March against the level of NZD194 billion in February. The level of trade surplus was substantially above the forecast of 200 billion, which is a positive indication for the economy. Export amounted to NZD4.53 billion last month against the forecast of 4.20 billion and imports totaled 4.07 billion versus expected 3.90 billion.

In addition, macro-statistics showed that level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates, against the level of +8 points in QIV.

According to the decision of the Reserve Bank of Zealand, made at the meeting last Thursday, interest rate was left unchanged, at the level of 2.5% per annum. The head of the RBNZ Mr. Bollard stressed that interest rate is not supposed to be changed yet. Regulator pointed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy. Statistics released previously was mixed: index of house prices REINZ rose by 0.5% m/m in March against prior forecast of growth by 2.3%; sale of houses last month reduced by 5.1% against preliminary level of -10.5%. In addition, food prices increased in the country by 0.3% in March against preliminary target at 0.1%. Prior to this the country had reported its positive trade surplus –for the first time over the last 8 months, which was caused by high commodity prices in the world and the rise in the levels of exports of timber and dry milk.

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