NZD: New Zealand Dollar is still on sale

At the Forex currency market the New Zealand Dollar rate continues to be in the focus of sellers on Tuesday morning; external background is not improving and investors try to get rid of positions that pose a risk.

Forex forecast: MACD indicator for the pair NZD/USD has merged with the signal line and is not giving a clear signal. Stochastic Oscillator has reached oversold zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8290, the pair will go to 0.8270 and 0.8250. The New Zealand Dollar continues to be guided by the external background which remains tense.

According to the released data, consumer confidence ANZ in New Zealand increased to 114.4 points in August against preliminary level of 109.4 points. CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is one more positive characteristic of the economic status in New Zealand. It is worth noting that permits for construction in New Zealand fell by 1.4% m/m in June against the forecast of +3.0%.

Last meeting of the Reserve Bank of New Zealand did not bring any surprises: it was decided to leave interest rate at the previous level of 2.5% per annum. In the follow-up comments the RBNZ said that monetary policy tightening which has been planned for the nearest future is aimed to duly curb the rise in prices in the country. As the head of the Bank, Mr. Bollard noted:”World financial risks have begun to fade out and economic growth continues to accelerate pace; therefore, there is no point to maintain the rate at the current low level any further.”

It became known earlier, that number of permits to construct in New Zealand increased by 13.0% in July against the fall of 1.3% in June. It is too early to speak about tendency in the indicator; nevertheless current results are quite good.

As it was made public earlier, retail sales in New Zealand increased by 0.9% q/q in Q2 against the forecast of growth by 0.7% on quarterly basis. According to the details given in the report the growth is attributed to the sale of motor spare parts, electrical goods and medicine.