2016-10-13 12:57:06

The New Zealand dollar has slightly decreased at the Asian session on Thursday.

Macro-economic data released earlier this week showed stability of the New Zealand economy. The data demonstrated that state budget balance of New Zealand was at the level of 1.8 billion NZD against 414 million NZD in the previous fiscal year. Consumer confidence index has grown by 1.1% in October, reaching the highs of mid-2015.

However, positive confidence index and improvements in the country’s economy, as well as budget surplus may not change the decision of the RBNZ to reduce interest rate at the meeting on 9 November. Markets estimate that probability of the rate cut is 85% against 60% a week earlier.

The increasing expectation of the cut in the key interest rate in November puts additional pressure on the national currency.

Earlier this week, Central Bank of the country confirmed intention to cut the rate next month, making it clear that the bank’s priority is inflation and inflation expectations. The auction of dairy products, which was held last week showed the decline in the world prices of dairy products by 3.0%.

Next week the other dairy products auction will be held.

Other important New Zealand’s data is not expected in the next two weeks. The pair NZD/USD will be mostly affected by the US news. As we know recent US news is mainly positive, which supports the USD. Therefore it is likely that till the end of October, the pair NZD/USD will remain under pressure.NZD/USD: The pair is under pressure till the end of December.  Fundamental analysis of 13/10/2016