NZD: New Zealand Dollar has reached lows again

At the Forex currency market the New Zealand Dollar continues to go down on Wednesday, regaining from the domestic news.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and is still descending, giving a pair sell signal. Stochastic oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: in case of breakdown at the level of 0.7415 the pair will go to 0.7370 and 0.7330. More distant targets for the bears is at 0.7300.

Policy gave cause of the NZD reduction: Prime Minister of the country John Key said in his interview with Bloomberg News that he would have approved the decision of the Reserve bank of New Zealand to reduce interest rate from the current 3% - the next meeting of the RBNZ is scheduled for 10 March.

Politician did not rule out that effect of the earthquake which took place in the South of New Zealand in February can contribute to the rollback of the national economy into the state of recession. 

As a result sales of the NZD did not take long to appear and the pair NZD/USD has reached its yearly lows again.

We would remind that at the last meeting in January the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. The Central Bank showed adherence to maintain monetary policy unchanged. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will sequentially increase over the next two years.

The data on New Zealand, released on Friday was mixed: index of industrial activity rose to the level of 53.7 in January against 53.2 in the previous period; producer prices at exit/entrance for quarter IV: +0.9%/+0.2% respectively; consumer confidence index ANZ increased to 108.2 in February against 117.1 in January. In addition, Finance Minister of New Zealand said a week earlier that strong domestic currency did not support national economy, and consequently economy looks not quite competitive.

The data on the business confidence NAB for January was ambiguous: thus, index demonstrated growth rate to 4 points against the decline by 3 points in December. Index of business conditions reduced to 6 points in the first month of the year against the previous value of 6. In addition, the data on the houses prices in January became known, which showed reduction by 1.5% y/y against -0.9% y/y in December.

 
 

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