NZD: New Zealand Dollar has no trading volumes at the end of the week

At the Forex currency market the New Zealand Dollar rate remains almost unchanged at the end of the week, trading volumes are low. Investors do not rush to buy or continue sales before the weekend.

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area and is giving a sell signal; volumes are increasing. Stochastic Oscillator remains in the oversold zone maintaining a similar signal.

Forex recommendations: in case of breakdown at the level of 0.7410, the pair will go to 0.7400 and 0.7390.

It became known yesterday that trade balance in New Zealand was at the level of –NZ$282 million in October against the level of NZ$784 million in September. The index remained in deficit last month although higher than the forecasts of economists.

Volumes of export increased by 5.3% (NZ$3.9 billion on annual basis in October and imports rose by 8.9% y/y due to demand for industrial production.

As it became known this week volume of retail sales in New Zealand increased by 2.2% q/q in Q3 against preliminary level of growth of 1.0%. In addition, activity index in the service sector BNZ decreased to 50.6 points in October against preliminary level of 52.9 points. The data released earlier showed that annual inflationary expectations in New Zealand declined to 2.72% in Q4 against the level of 2.94% a quarter earlier. This became another indication that economy of the country decelerates rates of growth.

According to previous data, GDP in New Zealand rose by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1. Thus New Zealand economy is actually in the state of stagnation. GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.

It will be difficult for the RBNZ to decrease the rate in the current economic situation, as the regulator keeps on pursuing quite aggressive monetary policy.