NZD: New Zealand Dollar moves further away from local highs

At the Forex currency market the New Zealand rate continues to retreat in pairing with the USD on Tuesday under the pressure of investors’ increasing risk aversion.  

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is growing, maintaining a pair buy signal. Stochastic Oscillator gives a pair sell signal today, going down in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7810 the pair will go to 0.7790 and 0.7770. If a breakdown does not take place, the pair will consolidate close to the current levels.

It was statistics on CPI that caused pullback in the New Zealand Dollar yesterday: 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 was weaker than expected which indicates that recovery pace of the national economy is low.

Statistics released earlier 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 the level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates against the level of +8 points in QIV.

Activity in March has not been impressive either: business confidence index NBNZ fell to -8.7 in New Zealand against 34.5 in the previous period. It is difficult to judge which factor has caused such rollback and it is worth waiting for the new data to be able to speak about one or another trend.

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