NZD: Trades for New Zealand Dollar is at the lows of this Autumn

At the Forex currency market the New Zealand Dollar rate is traded with minimal deviation on Tuesday; however it is still under pressure caused by investors’ low interest to risk. 

Forex forecast: MACD indicator for the pair NZD/USD is going down in the negative area and is giving a sell signal. Stochastic Oscillator remains in the oversold zone maintaining a similar signal.

Forex recommendations: in case of breakdown at the level of 0.7485, the pair will go to 0.7470 and 0.7460. If downward breakdown does not take place, the pair will consolidate at the achieved levels. The pair can reach the level of 0.7510 as part of rebound.

The data released this morning showed that annual inflationary expectations in New Zealand fell to 2.72% in Q4 against the level of 2.94% a quarter earlier. It became another indication that economic growth in the country is decelerating.

According to previous data, GDP in New Zealand rose by 0.1% q/q (+1.5% y/y) in Q2 against the level of +0.9% q/q (+1.6% y/y) in Q1. Thus New Zealand economy is actually in the state of stagnation. GDP almost stopped growing in the last quarter, which only proves that the decision of the RBNZ not to change the levels of the interest rate was logical. The report disappointed market and currently it is quite possible that regulator will keep interest rates at this level for a long time, at least until the end of spring 2012.

As it became known this week volume of retail sales in New Zealand increased by 2.2% q/q in Q3 against preliminary level of growth of 1.0%. In addition, activity index in the service sector BNZ decreased to 50.6 points in October against preliminary level of 52.9 points.

It will be difficult for the RBNZ to decrease rate under existing economic realities: regulator keeps on pursuing quite aggressive monetary policy.