NZD: New Zealand Dollar may continue sliding

Forex currency market the New Zealand Dollar rate continues attract sellers’ attention, but the selling volumes are not rising indicating kiwi’s strength. 

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and goes upward due to high volumes, giving a pair buy signal. Stochastic Oscillator is sliding in the neutral zone today, starting a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8030 the pair will go to 0.8010 and 0.7980. If the level of 0.8080 is exceeded, the pair will move to the previous highs of 0.8108.

As the data released today indicated, trade balance surplus in New Zealand increased to NZD464 mln in March against the level of NZD194 seen in February.

The surplus came out much better than the forecast of NZD 200 mln, which is a positive signal for the national economy. Exports amounted to NZD4,53 bln last month against the forecast of NZD4,20 bln, imports – to NZD4,07 bln against the forecast of NZD3,90 bln.

According to the Reserve Bank of New Zealand decision interest rate was left at the low level of 2.5%, clarifying that the rate is not going to be raised. Regulator stressed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy.

Statistics released earlier showed that inflation in New Zealand rose by 0.8% on quarterly basis (+4.5% y/y) in QI against the forecast of growth by 1.0% on quarterly basis. Therefore, CPI in the country turned out to be weaker than expected, which indicates that pace of economic recovery is slow.

Earlier data was mixed: index of houses prices REINZ increased by 0.5% in March against preliminary forecast of growth by 2.3%; while sale of houses reduced by 5.1% last month against preliminary level of -10.5%. In addition prices for food rose by 0.3% in March against preliminary target of -10.5%. In addition prices for food increased by 0.3% in March against the preliminary target of 0.1%. Earlier the country reported that trade surplus was positive for the first time in the last 8 months. High raw material prices which have been maintained in the world market became a catalyst for this, as well as the growth of export levels of timber and dry milk. Exports increased by 17% y/y in February; imports – by 23% y/y, to the level of 3.86 billion of NSD. Exports in New Zealand amounts to about 30% of the total GDP level and the increase in this article will have a positive impact on the national economy.

In addition it also became known that level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates, against the level of +8 points in QIV.?

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