NZD: New Zealand Dollar is finishing this week with significant increase

At the Forex currency market the New Zealand Dollar rate is traded downward on Friday as investors lock in profit at the end of the week.

Forex forecast: MACD indicator for the pair NZD/USD is in the negative area, and is going up, giving a buy signal. Stochastic Oscillator has come close to the overbought zone and is giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.8180, the pair will go to 0.8200 and 0.82200. If upward breakdown does not take place, the pair will consolidate at the achieved levels.

In terms of macro-economics, situation in New Zealand remains unchanged.

At the meeting on Thursday, the Reserve Bank of New Zealand decided to leave interest rate unchanged at the level of 2.5%. The RBNZ clarified that rate was left at the record-low level largely, because of debt crisis in Europe and slow down in inflation in New Zealand. According to the head of the regulator Alan Bollard, there is no point to raise the rate considering existing economic and financial risks. However, Bollard admitted that “if global developments will slightly affect the economy of New Zealand, it is possible that increasing pressure on domestic resources will gradually force us to raise the rate”

According to average estimate of the economists, interviewed by Bloomberg, the rate of the RBNZ is not going to be changed until Q2 of 2012.

Prior statistics showed 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. It is obvious that economy of the country, which is focused on exports, suffers from significant external impact: we are speaking here about global reduction in demand all over the world. Therefore, economy of New Zealand has actually fallen into 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. As it was made public earlier, house prices QV in New Zealand increased by 0.7% y/y in September against the rise of 0.1% y/y in August.

According to Fitch economists, current account surplus in New Zealand will expand in 1012 and   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.