NZD: The decline of the New Zealand Dollar can be suspended

At the Forex currency market the New Zealand Dollar rate continues to fall on Monday, however sales are low already. Signals indicate the beginning of rebound in the currency.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD, however it is directed upwards, which gives ground for a pair buy signal. Stochastic Oscillator is giving a similar signal today, being in the neutral zone.

Forex recommendations: if the rebound trend is maintained and in case of breakdown at the level of 0.7540 the pair will go to 0.7570 and 0.7650.
Nothing fundamentally new has happened in the New Zealand economy lately, the factor of pressure is the same as that on the Australian Dollar: difficult situation in the conflict area between South and North Koreas, which had worsened due to the military exercises conducted at the weekend. However the fact that China began to promote peaceful solution of the armed conflict contributes to the stabilization of the situation.

As it was reported earlier unemployment rate in New Zealand decreased to 6.4% in QIII against the previous level of 6.7% in QII. At the same time the change in the employment rate in QIII amounted to +1% against expectations of +0.5%.

In the mid of November the head of the Reserve bank of New Zealand Mr. Bollard emphasized that growth in NZD can affect future prospects of the interest rate increase and the New Zealand Dollar rate has been slightly overvalued for quite a long time. Monetary politician also expressed his opinion that currency rates in a number of countries are in such state now that they prevent from eliminating unbalance at the currency market. According to him minimization of economic stimulation measures bears risks for the global economy. However the US FR decision to start a new stage of stimulation had a positive effect at the global capital markets, although it puts pressure on the currency rates in the developing countries.

Reserve Bank of New Zealand continues to adhere to the policy of non-intervention and peace – the regulator is convinced that strong NZD prevents better balanced national economy, and recent research demonstrates that pace recovery in the domestic economy has slowed down. In addition the regulator stressed that banking system in New Zealand is good state, while real estate sales is reducing, which can be a signal for a new rebound in the sector.    

 

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