NZD: Sales of New Zealand Dollar would continue strongly

At the Forex currency market the New Zealand Dollar rate remains in the spotlight of sellers.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD; it is moving along the signal line and is not giving a clear signal.  Stochastic Oscillator is touched the oversold zone, maintaining a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8490, the pair will go to 0.8470 and 0.8450. 

It became known today 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. Wide spread risk aversion will remain the main driver for the pair NZD/USD.

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%. 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.

At the meeting which was held yesterday, the Reserve bank of New Zealand 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 is planned for the nearest future to duly curb the growth of 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 sense to maintain the rate at the current low level any further.”

 

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