NZD: New Zealand Dollar regains losses

At the Forex currency market the New Zealand Dollar rate regains on Tuesday after the fall to lows of ten- week. However, current growth of the pair NZD/USD shall be considered as a technical correction.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and is going down, confirming a previous sell signal for the pair. Stochastic Oscillator is coming out of the oversold zone today, starting to create a pair buy signal.

Forex recommendations: if current external background is maintained and in case of breakdown at the level of 0.7420, buyers’ targets will be the levels of 0.7445 and 07480.

In general, the situation in the economy of New Zealand remains unchanged.
The meeting of the Reserve bank of New Zealand is scheduled for 10 March, Thursday, therefore the rise in volatility is not excluded for the pair NZD/USD. Investors will be interested in the reaction of the NZRB on macro-statistics and comments.

Previous sales of the NZD were caused by the view of the country’s Prime Minister John Key, who said in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate from the current 3%; next meeting of the RBNZ is scheduled for 10 March. Politician does not rule out that effect of the earthquake which took place in the South of New Zealand in February can contribute to the rollback of the national economy into the state of recession.

We would remind that at the last meeting in January the Reserve Bank of New Zealand made an expected decision to keep interest rate at the previous level of 3.0% per annum. The Central Bank showed adherence to maintain monetary policy unchanged. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will sequentially increase over the next two years.

Statistics released in february was mixed: index of industrial activity rose to the level of 53.7 in January against 53.2 in the previous period; producer prices at exit/entrance for quarter IV: +0.9%/+0.2% respectively; consumer confidence index ANZ increased to 108.2 in February against 117.1 in January. In addition, Finance Minister of New Zealand said a week earlier that strong domestic currency did not support national economy, and consequently economy looks not quite competitive.

Thus, there are strong speculations at the market regarding the rate of the NZRB, which puts pressure on the NZD.

 

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