The Reserve Bank of New Zealand has recently published a report on financial stability. The central bank estimates the current state of the country's financial system as a good one. However, the bank's experts underline that the major risk is an imbalance in the local housing market.
In 12 months, housing prices in New Zealand have increased by 9.8%. The Governor of the RBNZ assumes that the market may see a retracement, which will result in financial stress.
Since the early 2000s, credit stimuli have been favoring the inflation of a price bubble in the local housing market. The RBNZ used interest rate cuts to restrain the process. Residential property is the major object of lending as well as the main asset for New Zeeland households. At the same time, the interest rates are at their lows, which means the pace of inflation in the housing market is accelerating. The banks are gradually cutting down on the loans for housing purposes.
Forex
According to Masterforex-V Academy, the New Zealand Dollar is recovering from the recent downtrend against the US Dollar. The experts report that NZDUSD is still forming wave a major downswing represented by А/В of level Weekly.
A further downswing below 0.8167 will probably give way to 0.8138/31, 0.8108, 0.8057. The current bearish move will be completed as soon as the price overcomes the top of the MF sloping channel and consolidates above 0.8394 (as shown below).
