NZD: New Zealand Dollar stands still in suspense

At the Forex currency market The New Zealand dollar rate stands still on Wednesday, determining movement direction.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, goes down, giving a sell signal. Stochastic Oscillator goes up in the neutral zone, giving a buy signal.

Forex recommendations: off the market.Feasible event scenario at Forex:  in case of breakdown at the level of 0.8135, the pair will go to 0.8150 and 0.8170.  If upward breakdown does not take place the pair will aim at 0.8080.

The following New Zealand statistics was released today:– Credit card spending increased by 0.6% m/m (+5.1% y/y) in May against the growth of 1.6% m/m in April;– Current account balance amounted to -NZD$0.097 billion in Q1 against the forecast of -NZD$0.900 billion.Note that ratio of the deficit to GDP totaled to -4.3% in Q1 this year against the forecast of -4.4% and the level of -2.3% in Q4 last year.

In other respects economic situation remains unchanged in New Zealand.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. Agency Fitch stated that New Zealand economy has demonstrated stabilization of the budget; however it is not sufficient yet to revise the rating outlook of the country from the current “negative”. Moody’s noted that authorities of New Zealand have been doing a good job, and take every step to bring economy to its normal state.Note: that budget deficit in New Zealand amounted to NZ$10.17 billion within 9 months, as of 31 March, which had been 15% higher than expected by economists.

Terms of trade index in New Zealand rose to the 37-year highs in QI, demonstrating growth by 0.9% (+6.8% y/y). It could be one of the indications that New Zealand economy is recovering as it reflects changes in prices for exports and imports. We would like to point that the index is strongly correlated with the index of living standard in the country which is a positive sign. It became known last week, that 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. 

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