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NZD/USD: is it possible to continue to grow? _01/06/2016

Technical analysis and trading recommendations -

Once in March, the central bank of New Zealand unexpectedly lowered its key interest rate market, the New Zealand dollar fell sharply on the currency market.
In the following comments from the RBNZ said that the central bank fears a further deterioration of the global economic outlook and the decline in inflation expectations in most of New Zealand.

Against the background of positive statistics on New Zealand, received yesterday, and today, the New Zealand dollar appreciated in the foreign exchange market. According to the presented data Tuesday, trust in the business community in New Zealand increased (Confidence in the business circles of New Zealand in May + 11.3% versus + 6.2% in April) in May, and its growth has been observed for the third month in a row. The growth of the index indicates an increase in business investment, which is conducive to production. Published today, the Bureau of Statistics New Zealand's terms of trade index, which reflects the ratio between exports and imports, has grown mainly due to the fall in import prices (+ 4.4% in the first quarter compared with the previous quarter), indicating that the increase in the balance surplus.
Inflation expectations in New Zealand with almost unchanged and amounted to 1.39% against 1.42% in May, in April.

Presented figures suggest that at the current stage of the New Zealand economy is not in need of further stimulation from monetary policy. Although the RBNZ is going to continue to adhere to a soft monetary policy, it is likely that during the meeting of June 9 Reserve Bank of New Zealand will keep the official interest rate at 2.25%. And this is a positive impact on quotations of the New Zealand dollar.

From the news today are waiting for US data, leaving at 13:45 and 14:00 (GMT), including PMI Markit index in the US manufacturing sector in May, ISM index of business activity in the US manufacturing sector in May, assessing the state of the industrial sector, gradual acceleration of inflation index from the ISM (an important indicator of the state of the US economy as a whole), construction spending in the US in April. In general, it expected growth rates, which will strengthen the US dollar in confirming forecasts, and vice versa.

In the period after 14:00 published price index for dairy products, prepared by the Global Dairy Trade, which is usually a strong effect on the New Zealand dollar quotes. With a decrease in world prices for dairy products pair NZD / USD lower. Volatility in the same period of time in the pair NZD / USD is expected to high.

Wednesday, 01 Jun, 2016 / 10:30

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