NZD: New Zealand Dollar tends to grow

NZD: New Zealand Dollar tends to growAt the Forex currency market on Tuesday, the New Zealand Dollar rate continues its upward trend that started yesterday, making use of the lull at the external markets to regain from previous losses.

Forex forecast: MACD indicator for the pair NZD/USD has broken through signal line from top to bottom and is giving a sell signal. It continues to go further down. Stochastic Oscillator has pushed away from oversold zone, which it did not come into, and goes up in the neutral zone, giving a buy signal.

Forex recommendations: in case of breakdown at the level of 0.8300, the pair will go to 0.8320 and 0.8350. If upward breakdown does not take place, the pair will consolidate close to the current levels.According to the data released today, 2-year inflation forecast in Q3 is at the level of 2.9% against the previous forecast of 3.0%.

Although the forecast was below expectations, it did not have a negative impact on the rate of the AUD. Trade balance in New Zealand increased by NZ$230 billion in June against the forecast of NZ$400 billion. Slowdown in surplus was logical in June: volume of growth rate in imports and exports fell last month. Thus exports increased by 4.5% in Q2, to NZ$12.2 billion; imports dropped by 1%, to the level of NZ$11.8 billion.

Exports to China and Australia fell sequentially: to +1.3% y/y (+24.2% y/y earlier) and 1.2% y/y (+4.7% y/y earlier) respectively. Last meeting of the Reserve Bank of New Zealand did not bring any surprises: it decided to leave interest rate at the previous level of 2.5% per annum. In the follow-up comments the RBNZ said that monetary policy tightening which has been planned for the nearest future is aimed to duly curb the rise in prices in the country.

As the head of the Bank, Mr. Bollard noted:”World financial risks have begun to fade out and economic growth continues to accelerate pace; therefore, there is no point to maintain the rate at the current low level any further.”According to the released data, consumer confidence ANZ in New Zealand increased to 114.4 points in August against preliminary level of 109.4 points. CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is one more positive characteristic of the economic status in New Zealand. It is worth noting that permits for construction in New Zealand fell by 1.4% m/m in June against the forecast of +3.0%.

It became known earlier that unemployment rate in New Zealand amounted to 6.5% in Q2 against revised similar value in Q1. Employment rate in New Zealand has not changed on quarterly basis in Q2, showing growth by 2.0% y/y, to 2.214 million. In general the data agreed with the economists’ forecast, unemployment rate had been even below consensus forecast of 6.6%. However, this did not prevent sales of the NZD. 

[More]