NZD: New Zealand Dollar remains close to the local lows

The New Zealand Dollar is close to the local lows at the Forex currency market on Thursday, still being under the pressure.

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

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7565 the pair will go to 0.7600 and 0.7650. If an upward breakdown does not take place the pair will continue to consolidate close to the current levels.

 The following New Zealand data was released today:

– Index of industrial activity in January: 53.7 against 53.2 for the previous period;

– Producer prices at exit/entrance for quarter IV: +0.9%/+0.2% respectively;

– Consumer confidence index ANZ in February: 108.2 against 117.1 in January.

In addition Finance Minister of New Zealand said on Thursday that strong domestic currency does not support national economy, due to which economy does not look quite competitive.

The data on the business confidence NAB for January was released last week: index demonstrated growth rate to 4 points against the decline by 3 points in December. Index of business conditions reduced to 6 points in the first month of the year against the previous value of 6. In addition the data on the houses prices in January became know, which showed reduction by 1.5% y/y against -0.9% y/y in December.

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. In the follow-up comments, the head of the RBNZ, Bollard stressed that the rates will be sequentially increased over the next two years. However, the regulator will keep the rate at the low levels until the situation in the economy regains confidence and the recovery process becomes stable. As for the internal economy of New Zealand, economic activity in the second half of 2010 turned out weaker than the forecast and the reduction of spending in the retail sector in QIV is not ruled out.

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