NZD: New Zealand Dollar tends downward

At the Forex currency market the New Zealand Dollar rate reverted to the downward movement on Tuesday. Investors’ doubts that China will start to reduce levels of import including those from New Zealand, has put pressure on the NZD, amplifying negative effect of the flooding in Australia.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is going up, giving a pair buy signal. Stochastic Oscillator is giving a similar signal today.

Forex recommendations: Considering pressure of the external background, off the market.

Feasible event scenario at Forex: if bearish sentiment intensifies for the pair, traders’ targets will be the levels of 0.7510 and 0.7450. Otherwise the pair will continue to consolidate close to the current levels.
The following data on New Zealand economy was released today:
– Construction permits in November: +8.8% against previous forecast of -2.0%;
– Level of business sentiment in new Zealand in QIV rose to 8 points, as per NZIER, against the previous level of 6 points.

Interest rate of the Reserve Bank of New Zealand is now at the level of 3.0% per annum. Commenting the last RBNZ meeting the regulator noted that the rate of the monetary policy tightening is expected to be moderate in the next two years, since the earthquake which happened in the country recently (and which was the strongest over the last 80 years) had a significant impact on the state of the national economy.

Regulator’s meetings in 2011 are scheduled for 26 January, 9 March, 27 April, 8 June, 27 July, 14 September, 26 October and 7 November.
Earlier Ministry of Finance brought down economic growth forecast for the current and the next fiscal years. In particular, estimate of GDP growth for the next fiscal year which starts on 1 June was brought down to 2.2% against the previous target level of 3.2%. In 2012 monetary politicians expect economic growth to 3.4%; however later, in 1015, economic growth in New Zealand will slow down again to - 2.7%.

In addition, it is assumed that there is a budget deficit in the country, which is expected to increase from the current 14.1% of GDP to 28.5% of GDP by June 2015. 
 

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