Genesis

Thank you.

Genesis

Pound is at 1.81108. Whoopey do. When will its rise end? About 5 mins ago perchance??

Charismatic

Apparently RBNZ have been interventioning.

Result:


No idea how they think intervention has no cost to the public, it suggests RBNZ haven't understood economics.

BlackCrossInResidence

In dded they have, but to little real effect.


Currencies: bazookas v peashooters
New Zealand’s action seems designed merely to soften the kiwi’s strength
Any officials facing the $4tn-a-day currency markets would rather hold a Hank Paulson-style bazooka than a peashooter. New Zealand said last week it had intervened to damp its currency in spite of conceding in February that the latter was all it had. The Kiwis are not alone. Australia and South Korea both just cut interest rates with one eye on currency strength, while the yen dropped through Y100 to the dollar. But, for all the skirmishing, are the battle fronts likely to move much?

The short answer is no. New Zealand’s direct action was the most aggressive, but it seems designed to soften the kiwi’s strength rather than halt the trend in its tracks. Which is just as well given that a housing bubble is limiting officials’ room for manoeuvre. With two-year bond yields near 2.5 per cent (compared with the US at 0.23 per cent and Japan at 0.11 per cent), it is hard to see the New Zealand dollar extending last week’s 2 per cent drop against its US counterpart.

Meanwhile, Australia’s unexpected rate cut had a similar effect on an Aussie dollar hovering just above parity with the greenback. Bond yields there are in line with Kiwi ones. So are Korea’s. Of the three Seoul is historically the most aggressive in acting to stem currency strength. But it faces the biggest problem, namely that it is in effect fighting not the dollar but the yen, against which the won has hit four-year highs
When Mr Paulson, as US Treasury secretary, talked about bazookas, he was underlining the importance of the markets knowing that there was one, and hence improving the likelihood of not having to use it. That was before the financial crisis, since when officials have deployed all kinds of weapons. Japan’s massive monetary expansion is, for now, the biggest bazooka out there. The yen’s one-fifth decline against the dollar in six months is as stunning as the Topix’s three-fifths rally in that time. But all rallies fade, and currency markets can produce some of the most vicious reversals. Any Japan converts not hedged should remember that.
Email the Lex team in confidence at [email protected]


http://www.ft.com/cms/s/3/110d13a0-b...#ixzz2T68K0gkT

Mark Smith

Do my eyes deceive me 1.97???

TommyLuck

If you're looking at xe.com, your eyes are perfectly fine

BEVS

Flippin' don't get me over excited.


edited....

and don't alert Genesis or it will tumble pronto.

jmh

Now all I need is a spiralling house market in the UK and a housing crash here and I'm sweet!

Charismatic

Going down quickly now, rebound?

downunderpom

Just the RBNZ keeping interest rates at the same level:

[ The Reserve Bank is leaving the official cash rate unchanged at 2.5 per cent and expects to keep it at that level until the end of the year.

While some bank economists expect the first move on interest rates will be in March next year, they expect some restrictions on low deposit, "high loan to value ratio" (LVR) home loans later this year.

The Reserve Bank is still consulting with big banks on the possible "speed limits" for LVR lending, but has not committed to any timing, yet.

Governor Graeme Wheeler said today that, given the present economic outlook, the bank expected no immediate change to interest rates.

"We expect to keep the OCR unchanged through the end of the year," he said. ]

http://www.stuff.co.nz/business/indu...-held-at-2-5pc

That rumour that interest rates were going to 7% appears to have been an attempt to cool the housing market in Auckland, rather than a real indicator of an interest rate change.

Charismatic

If the NZD devalues rapidly inflation will likely follow forcing them to raise rates early. Inflation has been negligible while the dollar value has been rising.

downunderpom

"Kiwi Plunges As China, Russia Suspend New Zealand Powder Milk Exports; 15% Of Exports At Stake"

Pound / Dollar at 1.98.

Could get better (or worse, depending on where your money is).

pippalonghorn

I daren't transfere my uk money over here as I will end up spending it all just to "get by". Left my savings in an international account off jersey. Not touching it.