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NZD/USD: the decline continues _05/04/2016

Technical analysis and trading recommendations -

Amid fears the central bank to further deterioration of the global economic outlook and inflation expectations in the country in early March, RB New Zealand cut interest rates by 0.25% to 2.25%, however, the statement of the Fed D.Yellen that is necessary slower increase in interest rates, the US dollar collapses in the financial market, including the pair NZD / USD.

Efforts to reduce the RBNZ New Zealand Dollar quotations were insufficient. NZD / USD rosed above $ 0.6900 last week.

The most important export sectors of the economy in addition to the timber industry is considered to be agriculture. About 18% of the total export volume of exports of dairy products. At the same time the largest buyer of New Zealand dairy products is China. From this it is clear that the decrease of Chinese imports on the background of a slowdown in China's economy, as well as low international prices for dairy and other agricultural produce, painfully affect the condition of the whole New Zealand economy.

The decline in world commodity prices, including dairy products, reduces the flow of export revenue to the state budget. Another negative factor for the country's exporters is the high rate of national currency.

Today, in the aftermath of 14:00 (GMT) is expected to publish an index of prices for dairy products on the auction results prepared by the Global Dairy Trade. The last time the index fell by 2.9%.

If the index will be released today with a reduction, it is logical to assume on a background of falling prices for oil and other commodities, the pair NZD / USD also fell.

Then the attention of market participants will be focused on the publication on Wednesday at 18:00 minutes of the last meeting with the Committee on the Federal Open Market to assess the prospects for further Fed plans on monetary policy in the United States.

The Fed intends to implement further rate hikes this year, but at a slower pace.

From the RBNZ is expected to further decline in interest rates, and in the course of the RBNZ meetings in June and August.

The difference between the Fed and RBNZ monetary policy will be the main fundamental factor in the medium term, exert downward pressure on the pair NZD / USD

Tuesday, 05 Apr, 2016 / 11:31

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