The rates continue in the frames of a weak upward trend with a wide range. This week New Zealand is preparing for elections that will be held tomorrow, September 23. According to recent polls the National party of New Zealand is more likely to win with 46% of the votes. The market has a positive attitude to such results, therefore the NZD received support thanks to this news.
But the political elections are not the only thing that affected the value of New Zealand's currency. This week the market received data about the GDP for the second quarter, showing that the GDP grew by 0.8% QoQ and coincides with the expectations of investors. In addition, the NZD's value was also affected by news from Australia about the situation of the Australian economy. The head of the RBA, Philip Lowe forecasts stable growth in the Australian economy for the next year and a further reduction in unemployment which will lead to GDP growth in Australia. Of course, economic growth and a good economic situation in the neighbouring country and its major trading partner will have a positive impact on the economy of New Zealand, and carries a potential for growth of exports from the country.
Despite many factors in favor of the NZD, it did not strengthen significantly because based on results of the FED meeting, the USD strengthened against most currencies. The Federal Reserve announced a possible rate hike in December and a reduction of its own balance next month. This news led to a rise for the leading US indices and the dollar. The probability of a rate hike this year is estimated by investors at 70%.
Next week is expected to be eventful enough. The market will get various economic statistics from the US: GDP data, consumer confidence index, and data on sales of new housing in the United States. From the NZD side we’ll get a new trade balance. Market volatility can be pretty high. At the moment the most optimal course would be the deals to BUY given that the NZD could strengthen more after the elections. The MACD oscillator also indicates an upward tendency for the NZD/USD.
