NZD: New Zealand Dollar makes no headway

At the Forex currency market the New Zealand dollar rate practically makes no headway on Monday.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and goes up, giving a pair buy signal. Stochastic Oscillator goes down in the neutral zone, giving a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8160 the pair will go to 0.81800 ? 0.8200. If upward breakdown does not take place the pair will consolidate close to the current levels.

The meeting of the Reserve Bank of New Zealand will take place on Thursday, 9 June: it is going to resolve interest rate issue and assess current state of the economy and its further development prospects.

Agency Fitch stated that New Zealand economy has demonstrated stabilization of the budget; however it is not sufficient yet to revise the rating outlook of the country from the current “negative”. Moody’s noted that authorities of New Zealand have been doing a good job, and take every step to bring economy to its normal state.

Note: that budget deficit in New Zealand amounted to NZ$10.17 billion within 9 months, as of 31 March, which had been 15% higher than expected by economists.

It became known last week that construction permits in New Zealand fell by 1.6% m/m in April against the forecast of growth by 0.5%. The data released earlier was mixed: house prices fell by 1.9% m/m in April against the decline by 2.0% in March and credit cards expenses rose by 1.7% ?/? in April against the increase by 0.5% in March and credit cards costs rose by 1.7% m/m in April against the growth by 0.5% in March. Therefore, real estate sector of New Zealand started to recover and it is a strong supportive factor for the economy. According to REINZ estimates house prices index in New Zealand increased by 1.1% m/m in April against the forecast of growth by 0.5% m/m. In addition, the agency reported that the level of house sales last month was -4.2% y/y against the level of -5.1% y/y in March. 

In addition, terms of trade index in New Zealand rose to the 37-year high in QI, demonstrating growth by 0.9% (+6.8% y/y). It could be one of the indications that New Zealand economy is recovering as it reflects changes in prices for exports and imports. We would like to point that the index is strongly correlated with the index of living standard in the country which is a positive sign.

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