NZ$ vs £
May 10th 2007, 9:28 pm
#136
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Joined: Oct 2006
Location: NZ
Posts: 3,366
Re: NZ$ vs £
Wait and see what happens after the NZ budget before trying to read the market is my advice. Cullen isn't gonna make the situation any easier IMO
May 11th 2007, 2:02 am
#137
Forum Regular
Joined: Apr 2007
Location: WA Perth at the mo'
Posts: 234
Re: NZ$ vs £
May 11 - Open: NZD slide against greenback gathers pace
NZPA | Friday, 11 May 2007
The New Zealand dollar is looking increasingly shaky, falling overnight to an eight-week low against its Australian counterpart and four-week low against the greenback.
The fall in the kiwi could bring some relief to hard pressed exporters, but make imports, such as oil, more expensive.
Ironically, the decline against the US dollar started the day the Reserve Bank lifted New Zealand's official interest rate a quarter of a percentage point to 7.75 per cent.
There had been concerns that move could lead to further rises in the kiwi, but it appears the Reserve Bank succeeded in unsettling the market at the same time, by describing the New Zealand dollar exchange rate as exceptional and unjustified.
Overnight, the kiwi's slide against the US dollar turned near vertical for a brief time with the NZ dollar losing around a third of a cent in just 15 minutes around 4am.
From US73.40c at 5pm yesterday, the NZ dollar was down to US72.84c at 8am today.
The greenback also rallied to one-month highs against the euro and 2½ month peaks versus the yen as investors trimmed bearish bets on the greenback after key central bank meetings this week.
Comments by US Treasury Secretary Henry Paulson that a strong US dollar was in the interest of the United States also helped the greenback's rally gather momentum, traders said.
Sentiment on the greenback had been negative for many weeks on concerns over the US economy and expectations for higher interest rates in Europe and Britain, pushing bearish positions on the currency to stretched levels.
But the outcome of three central bank meetings from the Federal Reserve, Bank of England, and European Central Bank offered few surprises, giving dealers little incentive to further sell the US dollar.
Against the aussie, the kiwi was down to A87.91c at 8am from A88.22c at 5pm yesterday. The NZ dollar's fall against its trans-Tasman counterpart has been particularly noticeable since last Friday when it was up around A89.70c.
A key boost for the aussie came on Tuesday when data showed bumper first-quarter retail sales across the Tasman, raising the chances that Australian interest rates would rise.
Later on Tuesday, Australian treasurer Peter Costello unveiled a big-spending pre-election budget, giving every Australian a tax cut and outlining a massive increase in education funding.
The ANZ bank today said selling of the kiwi had continued offshore on belief of better Australian growth prospects.
The kiwi was also down against other major currencies, buying 0.5400 euro at 8am from 0.5423 at 5pm yesterday and 87.29 yen from 88.11. The trade weighted index was at 70.70 from 71.18.
Reuters currency rates (8am today - 5pm yesterday):
NZ dlr/US dlr US72.84c - US73.40c
NZ dlr/Aust dlr A87.91c - A88.22c
NZ dlr/euro 0.5400 - 0.5423
NZ dlr/yen 87.29 - 88.11
NZ dlr/stg 36.79p - 36.81p
NZ TWI 70.78 - 71.18
Australian dollar US82.81c - US83.21c
Euro/US dollar 1.3488 - 1.3536
US dollar/yen 119.86 -120.04
NZPA | Friday, 11 May 2007
The New Zealand dollar is looking increasingly shaky, falling overnight to an eight-week low against its Australian counterpart and four-week low against the greenback.
The fall in the kiwi could bring some relief to hard pressed exporters, but make imports, such as oil, more expensive.
Ironically, the decline against the US dollar started the day the Reserve Bank lifted New Zealand's official interest rate a quarter of a percentage point to 7.75 per cent.
There had been concerns that move could lead to further rises in the kiwi, but it appears the Reserve Bank succeeded in unsettling the market at the same time, by describing the New Zealand dollar exchange rate as exceptional and unjustified.
Overnight, the kiwi's slide against the US dollar turned near vertical for a brief time with the NZ dollar losing around a third of a cent in just 15 minutes around 4am.
From US73.40c at 5pm yesterday, the NZ dollar was down to US72.84c at 8am today.
The greenback also rallied to one-month highs against the euro and 2½ month peaks versus the yen as investors trimmed bearish bets on the greenback after key central bank meetings this week.
Comments by US Treasury Secretary Henry Paulson that a strong US dollar was in the interest of the United States also helped the greenback's rally gather momentum, traders said.
Sentiment on the greenback had been negative for many weeks on concerns over the US economy and expectations for higher interest rates in Europe and Britain, pushing bearish positions on the currency to stretched levels.
But the outcome of three central bank meetings from the Federal Reserve, Bank of England, and European Central Bank offered few surprises, giving dealers little incentive to further sell the US dollar.
Against the aussie, the kiwi was down to A87.91c at 8am from A88.22c at 5pm yesterday. The NZ dollar's fall against its trans-Tasman counterpart has been particularly noticeable since last Friday when it was up around A89.70c.
A key boost for the aussie came on Tuesday when data showed bumper first-quarter retail sales across the Tasman, raising the chances that Australian interest rates would rise.
Later on Tuesday, Australian treasurer Peter Costello unveiled a big-spending pre-election budget, giving every Australian a tax cut and outlining a massive increase in education funding.
The ANZ bank today said selling of the kiwi had continued offshore on belief of better Australian growth prospects.
The kiwi was also down against other major currencies, buying 0.5400 euro at 8am from 0.5423 at 5pm yesterday and 87.29 yen from 88.11. The trade weighted index was at 70.70 from 71.18.
Reuters currency rates (8am today - 5pm yesterday):
NZ dlr/US dlr US72.84c - US73.40c
NZ dlr/Aust dlr A87.91c - A88.22c
NZ dlr/euro 0.5400 - 0.5423
NZ dlr/yen 87.29 - 88.11
NZ dlr/stg 36.79p - 36.81p
NZ TWI 70.78 - 71.18
Australian dollar US82.81c - US83.21c
Euro/US dollar 1.3488 - 1.3536
US dollar/yen 119.86 -120.04
May 12th 2007, 11:53 am
#138
Forum Regular
Joined: Jan 2007
Location: Holmfirth
Posts: 83
Re: NZ$ vs £
Interesting Speech - maybe some pointers here for future direction of the £/NZ$
Of course we all want a first world lifestyle.
But when it is increasingly based on debt, it is an illusion which is destined to disappoint in the long term.
This position is simply not sustainable.
The same economic statistics show that New Zealand's international liabilities in December 2006 were $143 billion – and growing.
Now to put that debt into perspective, our GDP – how much we earn as a nation – in the same December quarter was $160.2 billion.
We are barely making enough to cover our debts so it is little wonder we aren't growing as fast as we should be.
This debt is like a huge handbrake on the economy.
If we were to ask ourselves why it is that foreign investors find New Zealand so appealing, given that they are not resident here and so aren't in it for the lifestyle choice, a few further economics statistics provide at least some of the answers.
The most obvious are interest rates – the highest in the developed world.
On 26 April the Reserve Bank Governor raised interest rates again to bring them to 7.75%.
These rates are simply too good to resist for foreign investors and currency traders.
The net result, as we have all seen, is that in an effort to take advantage of these rates our dollar becomes more and more valuable and is now, again, reaching record high levels.
Now, to be fair, interest rates alone are not the sole factor influencing our high dollar. The relative strength of our economy and currency compared to other economies is also a critical factor. But interest rates are the primary driver.
http://www.scoop.co.nz/stories/PA0705/S00287.htm
Of course we all want a first world lifestyle.
But when it is increasingly based on debt, it is an illusion which is destined to disappoint in the long term.
This position is simply not sustainable.
The same economic statistics show that New Zealand's international liabilities in December 2006 were $143 billion – and growing.
Now to put that debt into perspective, our GDP – how much we earn as a nation – in the same December quarter was $160.2 billion.
We are barely making enough to cover our debts so it is little wonder we aren't growing as fast as we should be.
This debt is like a huge handbrake on the economy.
If we were to ask ourselves why it is that foreign investors find New Zealand so appealing, given that they are not resident here and so aren't in it for the lifestyle choice, a few further economics statistics provide at least some of the answers.
The most obvious are interest rates – the highest in the developed world.
On 26 April the Reserve Bank Governor raised interest rates again to bring them to 7.75%.
These rates are simply too good to resist for foreign investors and currency traders.
The net result, as we have all seen, is that in an effort to take advantage of these rates our dollar becomes more and more valuable and is now, again, reaching record high levels.
Now, to be fair, interest rates alone are not the sole factor influencing our high dollar. The relative strength of our economy and currency compared to other economies is also a critical factor. But interest rates are the primary driver.
http://www.scoop.co.nz/stories/PA0705/S00287.htm
May 14th 2007, 6:34 am
#139
Forum Regular
Joined: Jan 2007
Location: Holmfirth
Posts: 83
Re: NZ$ vs £
Raising interest rates simply increases the magnetic attractions of New Zealand for foreign investors
http://news.independent.co.uk/business/comment/article2539568.ece
Basically he argues that increasing interest rates attracts more hot global money and raises money supply - which flows through to easier lending, higher asset prices and greater spending - which leads to higher interest rates etc.etc.
"exchange rate movements and foreign capital inflows are affected not just by domestic monetary decisions but also by the monetary policies and economic conditions prevailing in other countries. There's nothing new about any of this. What's more surprising, perhaps, is the idea that inflation targeting had resolved these age-old conundrums. It hasn't. Time, perhaps, for some renewed soul-searching from the world's central bankers."
http://news.independent.co.uk/business/comment/article2539568.ece
Basically he argues that increasing interest rates attracts more hot global money and raises money supply - which flows through to easier lending, higher asset prices and greater spending - which leads to higher interest rates etc.etc.
"exchange rate movements and foreign capital inflows are affected not just by domestic monetary decisions but also by the monetary policies and economic conditions prevailing in other countries. There's nothing new about any of this. What's more surprising, perhaps, is the idea that inflation targeting had resolved these age-old conundrums. It hasn't. Time, perhaps, for some renewed soul-searching from the world's central bankers."
May 22nd 2007, 11:54 am
#140
BE Enthusiast
Joined: Nov 2006
Location: NI New Zealand
Posts: 347
Re: NZ$ vs £
For those seriously considering where to invest as meltdown approaches.
Some interesting comments from readers at the end of the article.
Worth reading for that alone.
Financial bubble - who will say that the emperor is naked?
http://europe.theoildrum.com/node/2564#more
Some interesting comments from readers at the end of the article.
Worth reading for that alone.
Financial bubble - who will say that the emperor is naked?
http://europe.theoildrum.com/node/2564#more
May 31st 2007, 11:51 am
#141
Forum Regular
Joined: Jan 2007
Location: Holmfirth
Posts: 83
Re: NZ$ vs £
Buoyant stocks help Aussie and Kiwi advance
- Financial Times UK
Published: May 31 2007 11:46 | Last updated: May 31 2007 11:46
The high-yielding Australian and New Zealand dollars advanced on Thursday, boosted by a strong performance from global equity markets.
Analysts said buoyant stock markets had lifted risk appetite and sparked fresh demand for carry trades, in which the purchase of riskier, high-yielding assets is funded by selling low-yielding currencies such as the yen.....
However, Adrian Schmidt, senior foreign exchange strategist at Royal Bank of Scotland, said investors should be selective as to which high-yielding currencies to buy.
According to Mr Schmidt, robust Australian capital spending figures could support the Australian currency, while the sharp decline in New Zealand business confidence figures, released overnight, should concern investors.
He said the high level of interest rates in New Zealand, combined with the high currency and the heavily indebted consumer sector meant the economy was living on borrowed time, as well as borrowed money, and the sharp drop in confidence looked like an early warning sign.
“The rally in the New Zealand looks like a selling opportunity,” said Mr Schmidt. “There looks to be better value in other high yielders
- Financial Times UK
Published: May 31 2007 11:46 | Last updated: May 31 2007 11:46
The high-yielding Australian and New Zealand dollars advanced on Thursday, boosted by a strong performance from global equity markets.
Analysts said buoyant stock markets had lifted risk appetite and sparked fresh demand for carry trades, in which the purchase of riskier, high-yielding assets is funded by selling low-yielding currencies such as the yen.....
However, Adrian Schmidt, senior foreign exchange strategist at Royal Bank of Scotland, said investors should be selective as to which high-yielding currencies to buy.
According to Mr Schmidt, robust Australian capital spending figures could support the Australian currency, while the sharp decline in New Zealand business confidence figures, released overnight, should concern investors.
He said the high level of interest rates in New Zealand, combined with the high currency and the heavily indebted consumer sector meant the economy was living on borrowed time, as well as borrowed money, and the sharp drop in confidence looked like an early warning sign.
“The rally in the New Zealand looks like a selling opportunity,” said Mr Schmidt. “There looks to be better value in other high yielders
May 31st 2007, 7:41 pm
#142
BE Enthusiast
Joined: May 2006
Posts: 716
Re: NZ$ vs £
For those seriously considering where to invest as meltdown approaches.
Some interesting comments from readers at the end of the article.
Worth reading for that alone.
Financial bubble - who will say that the emperor is naked?
http://europe.theoildrum.com/node/2564#more
Some interesting comments from readers at the end of the article.
Worth reading for that alone.
Financial bubble - who will say that the emperor is naked?
http://europe.theoildrum.com/node/2564#more
Better spend all my money now on living it up ?
Last edited by brussels_sprout; May 31st 2007 at 7:52 pm.
May 31st 2007, 9:01 pm
#143
BE Enthusiast
Joined: Nov 2006
Location: NI New Zealand
Posts: 347
Re: NZ$ vs £
If you think such a meltdown will occur, then don't you think it will be accompanied by an orchestrated "killing off" of a substantial part of the human race too ? Maybe all the current fashion for mining may be just a way for the elite to keep their wealth intact in the form of metal. They will already be arranging antidotes, as the killing off will have to be biological rather than by war, which may destroy them too. It is possible ....... If you look at the second world war, it was a solution to the depression years of the 30s , war and great plagues seem to go together in the past too. NZ would be one of the best places to live in such a case, but it would only be a question of time ........
Better spend all my money now on living it up ?
Better spend all my money now on living it up ?
Obviously the planet can't support 6.5 billion (projected to reach 10 billion) with a contracting energy supply and environmental degradation.
It follows then, there's going to be a reduction in the world's population. Probably through a combination of events.
So, yes New Zealand is a good place to be in a crises and I suspect quite a few are coming here for that reason, though not publicly admitting it.
As for spending up?
Best pay off your debts first and then arrange matters to secure your children's future.
Kip
Off for Queen's Birthday
May 31st 2007, 10:33 pm
#144
Forum Regular
Joined: Jan 2007
Location: Holmfirth
Posts: 83
Re: NZ$ vs £
NZ would be one of the best places to live in such a case,
Mostly, it’s the push factor because they do not know enough about our lifestyle to make such an emphatic statement about such a fundamental decision. What they really mean is they are unsatisfied with their UK lifestyle – be it Iraq, home-grown terrorism, decreasing confidence in social policy delivery, an unpalatable social environment or whatever.
Because security concerns rank highest among Britain’s brain-drain migrants, it is not surprising that qualified, wealthy migrants choose New Zealand.
They know there is greater prosperity in Sydney or Los Angeles, Melbourne or Toronto, but those choosing New Zealand are trading riches for security. It’s as if the Swiss sanctuary of the 20th century is fast making way for New Zealand in the 21st century.
In September 2001, the New Zealand housing market took off in direct parallel with “the war on terror.” Barring domestic disaster, we should expect to be a hot destination into the longer term.
Auckland house prices in particular can rise to meet Sydney’s and Los Angeles’ before we might expect to see a natural market ceiling, because security issues overshadow house prices by two to one and employment opportunities by three to one.
New Zealanders are reaping a geo-political dividend from 30 years of largely bi-partisan foreign policy. That policy has kept us safe, inconsequential, honest and fair, unpretentious and a non-belligerent developed (even if junior) first world country.
Our isolation by sea and geographic location is the equivalent of the defence offered by the Alps to Switzerland in earlier times. The dividend is coming through in the form of rising land prices, so let’s celebrate our success.
http://www.nbr.co.nz/home/column_art...me=NBR+Comment
May 31st 2007, 11:02 pm
#145
Forum Regular
Joined: May 2007
Location: Hutt Valley, Wellington, New Zealand
Posts: 100
Re: NZ$ vs £
Thank god someone else said it for me! lol. How on earth am I (the Homer Simpson of Upper Hutt) meant to understand all that gobbledegook!
I find that a lot of financial advisers, planners...or whatever you want to call them.. just run away with the jargon and leave me cold. Even my accountant has a terrible time explaining tax liability to me... Doh!
I find that a lot of financial advisers, planners...or whatever you want to call them.. just run away with the jargon and leave me cold. Even my accountant has a terrible time explaining tax liability to me... Doh!
May 31st 2007, 11:23 pm
#146
Joined: Apr 2007
Posts: 1,454
Re: NZ$ vs £
Thank god someone else said it for me! lol. How on earth am I (the Homer Simpson of Upper Hutt) meant to understand all that gobbledegook!
I find that a lot of financial advisers, planners...or whatever you want to call them.. just run away with the jargon and leave me cold. Even my accountant has a terrible time explaining tax liability to me... Doh!
I find that a lot of financial advisers, planners...or whatever you want to call them.. just run away with the jargon and leave me cold. Even my accountant has a terrible time explaining tax liability to me... Doh!
The creator of Dilbert (!) made a 9-point plan for people seeking financial advice and, whilst it is aimed at Americans, it's pretty sound. You can see it at the start of this article..
http://bigpicture.typepad.com/commen...ts_unifie.html
oh, and if you want to read about just how stupid the entire world of financial investing is you should pick up a copy of 'Liars Poker' by Michael Lewis. It shows that investment firms and casinos are basically run on the same lines.
Last edited by Avid; May 31st 2007 at 11:29 pm.
Jun 5th 2007, 11:58 pm
#147
BE Enthusiast
Joined: Nov 2006
Location: NI New Zealand
Posts: 347
Re: NZ$ vs £
"It is this: 85 in every 100 of British migrants say their main reason to migrate is “lifestyle choice.” But is lifestyle choice a push or is it a pull factor?
Mostly, it’s the push factor because they do not know enough about our lifestyle to make such an emphatic statement about such a fundamental decision. What they really mean is they are unsatisfied with their UK lifestyle – be it Iraq, home-grown terrorism, decreasing confidence in social policy delivery, an unpalatable social environment or whatever.
Because security concerns rank highest among Britain’s brain-drain migrants, it is not surprising that qualified, wealthy migrants choose New Zealand.
They know there is greater prosperity in Sydney or Los Angeles, Melbourne or Toronto, but those choosing New Zealand are trading riches for security. It’s as if the Swiss sanctuary of the 20th century is fast making way for New Zealand in the 21st century.
In September 2001, the New Zealand housing market took off in direct parallel with “the war on terror.” Barring domestic disaster, we should expect to be a hot destination into the longer term.
Auckland house prices in particular can rise to meet Sydney’s and Los Angeles’ before we might expect to see a natural market ceiling, because security issues overshadow house prices by two to one and employment opportunities by three to one.
New Zealanders are reaping a geo-political dividend from 30 years of largely bi-partisan foreign policy. That policy has kept us safe, inconsequential, honest and fair, unpretentious and a non-belligerent developed (even if junior) first world country.
Our isolation by sea and geographic location is the equivalent of the defence offered by the Alps to Switzerland in earlier times. The dividend is coming through in the form of rising land prices, so let’s celebrate our success.
http://www.nbr.co.nz/home/column_art...me=NBR+Comment
Mostly, it’s the push factor because they do not know enough about our lifestyle to make such an emphatic statement about such a fundamental decision. What they really mean is they are unsatisfied with their UK lifestyle – be it Iraq, home-grown terrorism, decreasing confidence in social policy delivery, an unpalatable social environment or whatever.
Because security concerns rank highest among Britain’s brain-drain migrants, it is not surprising that qualified, wealthy migrants choose New Zealand.
They know there is greater prosperity in Sydney or Los Angeles, Melbourne or Toronto, but those choosing New Zealand are trading riches for security. It’s as if the Swiss sanctuary of the 20th century is fast making way for New Zealand in the 21st century.
In September 2001, the New Zealand housing market took off in direct parallel with “the war on terror.” Barring domestic disaster, we should expect to be a hot destination into the longer term.
Auckland house prices in particular can rise to meet Sydney’s and Los Angeles’ before we might expect to see a natural market ceiling, because security issues overshadow house prices by two to one and employment opportunities by three to one.
New Zealanders are reaping a geo-political dividend from 30 years of largely bi-partisan foreign policy. That policy has kept us safe, inconsequential, honest and fair, unpretentious and a non-belligerent developed (even if junior) first world country.
Our isolation by sea and geographic location is the equivalent of the defence offered by the Alps to Switzerland in earlier times. The dividend is coming through in the form of rising land prices, so let’s celebrate our success.
http://www.nbr.co.nz/home/column_art...me=NBR+Comment
"trading riches for security".... I like that
Perhaps few know about the "loss of riches" bit and that's where they go wrong.
As for security: did you see the news item about British children no longer being allowed to roam from home?..........sad.
Kip
Jun 11th 2007, 1:56 am
#149
BE Enthusiast
Joined: May 2006
Posts: 716
Re: NZ$ vs £
After all the blatant ramping by goldbugs in this thread, let's see what will happen to gold now that the US dollar is now changing direction, gold will start to drop quite quickly (that is my prediction anyway). Gold will now only go up if there are serious security problems in the world.
All the end of the world stories and conspiracy theories gave me a laugh anyway (at the time)
NZD will start to drop against the USD too
All the end of the world stories and conspiracy theories gave me a laugh anyway (at the time)
NZD will start to drop against the USD too
Last edited by brussels_sprout; Jun 11th 2007 at 2:04 am.