NZD: New Zealand Dollar went crashing down

The New Zealand Dollar rate, which recently felt quite confident at the Forex currency market, has collapsed by two figures today, due to the earthquake in the South of the country- which, along with investors’ withdrawal from risky positions became a negative factor that became too palpable for the NZD.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD; earlier the indicator has crossed the signal line from top to bottom and still continues to give a pair sell signal. Stochastic Oscillator has reached overbought zone and turned down sharply, giving a similar signal. 

Forex recommendations: traders’ targets today will be the levels of 0.7460/50 and 0.7430.

Due to the fact that in spite of the recent events the New Zealand economy s quite stable at the moment, current downfall can be considered as a good chance to buy a pair at the local lows.

The report of the Reserve Bank of new Zealand released this morning showed that two-years inflation forecasts remained unchanged in QI: +2.6%.

The New Zealand data released on Friday was multidirectional: index of industrial activity rose to the level of 53.7 in January against 53.2 for 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 last week that strong domestic currency did not support national economy, and consequently economy does not look quite competitive.

The data on the business confidence NAB for January was released earlier: 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 known, 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. 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. 

 

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