NZD: New Zealand Dollar hopes to continue its growth

The New Zealand Dollar rate strengthens slightly at the Forex currency market in the middle of the week; external background remains moderately uncertain, and while there are no obviously negative factors, the AUD is growing.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area; however it goes up slightly, starting to shape a buy signal. Stochastic Oscillator maintains similar signal in the overbought zone.

Forex recommendations: in case of breakdown at the level of 0.7830, the pair will go to 0.7850 and 0.7880

As it became known on Wednesday morning, house prices QV in New Zealand increased by 0.7% y/y in September against the rise of 0.1% y/y in August.

Meanwhile, the AUD is closely monitoring the situation in China, since potential trade war between China and the USA does not promise anything good to high-yielding currencies.

It became known earlier that GDP in New Zealand increased by 0.1% q/q (+1.5% y/y) in Q2 against +0.9% q/q (+1.6% y/y) in Q1. Commodity prices ANZ in New Zealand fell by 1.3% m/m in September against -1.2% m/m. Apparently, economy of the country which is focused on exports suffers from significant external impact: we are speaking here about global reduction of demand all over the world.

Therefore, economy of New Zealand is actually in stagnation: GDP almost stop its growth 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.

According to Fitch economists, current account surplus in New Zealand will expand in 1012 and will amount to 4.9%, in 2013-5.5%. At the same time net level of foreign debt of New Zealand is above the level corresponding to its ranking. Finance Ministry of the country noted that rating agencies in the world are too cautious about debt problems and it is still unknown whether the similar actions should be expected from other players in the ranking sector. Earlier the head of the Reserve Bank of New Zealand said that probably financing of the banks in the country can become a problem in 1012. According to Bollard banking system of New Zealand is in a better state now that it was in 2008; however risks from Europe and the U.S. are still there. The rate of NZD is still overvalued.