NZD: New Zealand Dollar once again tends to grow

At the Forex currency market, the New Zealand Dollar rate begun to grow in the middle of the week, remaining nevertheless, within the five-day range of 0.8232-0.8331.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and is going up, giving a buy signal, volumes are increasing. Stochastic Oscillator remains in the oversold zone, giving a similar signal; however tends to go downward out of the zone.

Forex recommendations: in case of breakdown at the level of 0.8290, the pair will retest the level of 0.8331 and will go to 0.8340.

As part of profit taking the AUD could sag to 0.8250/ 30.The report on New Zealand GDP, planned for today, was postponed until 14 July- the Bureau of Statistics said that more time is needed to review the indicators.However, it became known that net level of budget deficit in New Zealand rose to -NZD$40 billion (20.4% billion of the country’s GDP) in May, which was below economists’ forecast.

According to the estimates of the Finance Minister Mr. English, budget deficit is still too large and active measures are required to reduce it.Consumer confidence index Westpac in New Zealand increased to 112.0 points in Q2 against the level of 97.7 points in Q1. Consumer confidence ANZ increased to 112.5 points in June against the preliminary level of 103.3 points.

In addition, volume of retail sales in New Zealand rose for the first time in the last three quarters in Q1, which is a good sign of the economic recovery. Thus, indicator increased by 0.9% q/q which agreed with the forecast, excluding inflation. At the same time, trade balance in New Zealand was at the level of NZD$605 billion in May against the forecast of NZD$1000 billion.

This is a negative data, because decline in the trade balance will indicate decline in the level of exports later, which will be the impact of cooling in Chinese economy.Earlier, the Reserve Bank of New Zealand decided to keep interest rate unchanged at the minimum of 2.50% per annum, since it is going to continue its work on improvement in economic system.

According to the head of the RBNZ, NZD has been overvalued because of high export prices for raw materials, therefore, national currency rate, which has increased over the last two months, has adverse impact on the rebalancing of the economy in New Zealand. Bollard expressed confidence that decline of the NZD will be gradual because currency intervention will not be able to change the trend.

It became known yesterday that business sentiment NZIER in New Zealand rose to 27 points in Q2 against -27 points earlier. In general, it is a positive factor.

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