The rates continue within a weak downtrend. In the second half of the year investors are becoming more cautious and the market situation is considered quite unfavorable for the global economy.
This week, the NZD/JPY pair is in the focus of investors' attention, as the RBNZ unexpectedly raised the rate by 25 points. Unfortunately, this didn't change anything for the NZD. External factors are putting increasing pressure on the NZD. At the end of September, investors were selling commodity assets due to the possible bankruptcy of the Chinese Evergrande Group and serious consequences for the Chinese economy, and New Zealand exports a significant part of its products there and depends on the economic situation in China. This factor turned out to be secondary: at the moment, Asian stock markets are falling due to a record rise in oil prices, which may lead to an excessive increase in inflation. At the same time, for New Zealand the rise in oil prices is bad news because this resource is imported from other countries.
At the same time, for Japan the increase in energy prices has so far had a positive effect on inflation, shifting the consumer price index from a negative value to a positive one. Unemployment remained unchanged at 2.8%, but industrial production output declined in August, for the second month in a row. Nevertheless, the yen is traditionally strengthened due to external factors and its status of a safe asset, and not thanks to success in the economy.
Most technical analysis tools indicate the effectiveness of of the deals in favor of the JPY. We also believe that trend-based deals will be more effective during a period of deterioration on the market and a likely economic crisis.
