The rates continue in the frames of a downward trend. The New Zealand dollar is still losing positions due to the unconvincing economic situation, lower commodity prices and the probability of further decreasing in exports due to the trade war between the US and China. The soft monetary policy of the reserve Bank is also not supporting the NZD.
A week ago the New Zealand dollar reached a 24-month low, then retreated from it within the price correction. The strengthening of the NZD became possible based on news from the US and the escalation of the trade war. Today the introduction of trade tariffs between the US and China is expected. In addition, China's reaction to the US sanctions against large Chinese companies, including China Mobile, is expected. The USD also retreated due to disappointing employment reports from the ADP. In particular, it became known that the number of employed in the non-agricultural sector increased by 177,000 jobs in June, while investors expected an increase to 190 thousand jobs. The total number of persons receiving unemployment benefits increased to 1,739, which is also higher than expected on the market. Thus, there is a high probability that today's unemployment reports will also not meet the forecasts. It is also unlikely to expect a decrease in import volumes in the United States for June, given that it was before the imposition of trade duties.
Given the Situation in New Zealand and the lack of incentives for growth, the strengthening of the NZD can be considered as a temporary phenomenon. The decline in raw material prices continues. In particular, milk prices fell by 4.79%, the price index of commodities from ANZ has decreased by another 1%, while the price index from Global dairy trade dropped by 5%. We are currently seeing a price correction, which has not yet been completed. This is likely to happen next week. At the moment the USD is not able to find enough incentives for growth, but with the release of new statistics next week the situation may change. In the medium term, the most effective would be the deals to SELL. The price correction is nearing completion, which is confirmed by the Stochastic and RSI oscillators. However, it would be still possible to make a profit on the deals against the trend if they are opened in the very near future.
