What's with the kiwi $?
Oct 24th 2008, 1:48 am
#1
BE Forum Addict
Thread Starter
Joined: Sep 2006
Posts: 4,298
What's with the kiwi $?
Calling all those FX wise. I don't understand why the kiwi did not weaken overnight generally after the 1% drop and the notion of more % drops soon. I know its low against the US$ but I am surprised it is currently strong at $2.72 gbp when a couple of weeks ago it was firm in the late $2.80 territory for a GBP, over nite the same week it peaked at over $3!!!!! Wish I had put a request in with HIFX to buy in the UK for me..apparently you can ask them to buy at a predetermined rate. I know all about crystal balls but does anyone have an idea where the kiwi may go? I have heard thru' the grapevine that it IS set to weaken and edge up to the $2.90 ish mark....any thoughts??
Oct 24th 2008, 2:01 am
#2
`
Joined: Oct 2003
Posts: 38,613
Re: What's with the kiwi $?
I subscribe to Elldridge Lynch FX email services on certain currencies. Subscribing to the NZ one comes with a commentary as do other currencies you subscribe to. I read both the NZD and GBP daily.
Example received this morning :-
Dunno if you would find this useful or not. I s'pose if nothing else it just gives another perspective as to what may or may not happen .
That is called a forward contract. Most forex co's will do that .
HTH
Example received this morning :-
Overnight Markets
Global recession fears and associated risk aversion are overwhelming market sentiment at the moment. It has become a real shocker with doom and gloom motivation in all directions. Equity markets are a little mixed with Asians all down after weaker than expected Japanese export data, Europeans sharing red and blue ink, but the US markets are in negative after more job losses for major US companies, a bleak outlook for auto makers. Should it be reported the Dow was in negative territory but in the witching hour period there has seen a sharp rally back into positive (from -100 to +27, and even as this sentence is being written in a matter of seconds the Dow us now -48)
Speculation is for 200k of job losses this month alone - General Motors is planning involuntary cuts in it's workforce, Chrysler looks like shedding 2000 jobs, Goldmans over 3000, Xerox is cutting staff, to mention just some major US Corporations either having announced staff cuts or planning them. The gloom in the auto industry is not restricted to the US either - Daimler and Hyundai are amongst global companies expecting a very bleak 2009.
NZD has been wobbling around, mostly on a down trend. The rate cut announced yesterday was built in and actually sent the NZD initially higher as disappointment from some quarters that the cut was not more spilled into a short buying spree. However global market issues soon had the rate cut lost in the gloom of recession and has seen the currency trade as low as 0.5797. AUD is equally troubled, especially as commodities have tumbled. All metals and oil are just collapsing. Not long ago gold was at $950 and oil at $150 - now we are seeing $712 and $67 respectively.
Today's Market
The work is cut out for Governments, Central Banks, and Financial Agencies such as the IMF and World Bank to stitch all this back together again. Gloom and doom is just totally saturating markets and undermining investor confidence. Greenspan is taking a bashing for the problems as inevitably a scapegoat is considered. Greenspan himself said he is shocked at the breakdown in US credit markets and has admitted partial blame resisting regulating some securities.
The irrational behaviour of all markets stemming from the severe credit crunch, and recession fears looks unlikely to change for the foreseeable future.
As this commentary continues to be written, the Dow collapsed to -100, and is now at +131 with NZD recovering to 0.5900. For the local population - tax cuts, better fuel prices, and lower mortgage rates provide a glimmer of hope, and while a global recession will inevitably bite here, the food bowl of the South Pacific may ride through it in reasonable shape - primary exporters benefiting from the dip in the NZD.
Again a reminder: We will be closed Monday 27th for Labour Day.
Global recession fears and associated risk aversion are overwhelming market sentiment at the moment. It has become a real shocker with doom and gloom motivation in all directions. Equity markets are a little mixed with Asians all down after weaker than expected Japanese export data, Europeans sharing red and blue ink, but the US markets are in negative after more job losses for major US companies, a bleak outlook for auto makers. Should it be reported the Dow was in negative territory but in the witching hour period there has seen a sharp rally back into positive (from -100 to +27, and even as this sentence is being written in a matter of seconds the Dow us now -48)
Speculation is for 200k of job losses this month alone - General Motors is planning involuntary cuts in it's workforce, Chrysler looks like shedding 2000 jobs, Goldmans over 3000, Xerox is cutting staff, to mention just some major US Corporations either having announced staff cuts or planning them. The gloom in the auto industry is not restricted to the US either - Daimler and Hyundai are amongst global companies expecting a very bleak 2009.
NZD has been wobbling around, mostly on a down trend. The rate cut announced yesterday was built in and actually sent the NZD initially higher as disappointment from some quarters that the cut was not more spilled into a short buying spree. However global market issues soon had the rate cut lost in the gloom of recession and has seen the currency trade as low as 0.5797. AUD is equally troubled, especially as commodities have tumbled. All metals and oil are just collapsing. Not long ago gold was at $950 and oil at $150 - now we are seeing $712 and $67 respectively.
Today's Market
The work is cut out for Governments, Central Banks, and Financial Agencies such as the IMF and World Bank to stitch all this back together again. Gloom and doom is just totally saturating markets and undermining investor confidence. Greenspan is taking a bashing for the problems as inevitably a scapegoat is considered. Greenspan himself said he is shocked at the breakdown in US credit markets and has admitted partial blame resisting regulating some securities.
The irrational behaviour of all markets stemming from the severe credit crunch, and recession fears looks unlikely to change for the foreseeable future.
As this commentary continues to be written, the Dow collapsed to -100, and is now at +131 with NZD recovering to 0.5900. For the local population - tax cuts, better fuel prices, and lower mortgage rates provide a glimmer of hope, and while a global recession will inevitably bite here, the food bowl of the South Pacific may ride through it in reasonable shape - primary exporters benefiting from the dip in the NZD.
Again a reminder: We will be closed Monday 27th for Labour Day.
apparently you can ask them (HIFX) to buy at a predetermined rate
HTH
Last edited by BEVS; Oct 24th 2008 at 2:08 am.
Oct 24th 2008, 2:04 am
#3
BE Forum Addict
Thread Starter
Joined: Sep 2006
Posts: 4,298
Re: What's with the kiwi $?
I subscribe to Elldridge Lynch FX email services on certain currencies. It comes with a commentary on the NZD .
Example received this morning :-
Dunno if you would find this useful or not. I s'pose if nothing else it just gives another perspective as to what may or may not happen .
That is called a forward contract. Most forex co's will do that .
HTH
Example received this morning :-
Dunno if you would find this useful or not. I s'pose if nothing else it just gives another perspective as to what may or may not happen .
That is called a forward contract. Most forex co's will do that .
HTH
Oct 24th 2008, 5:41 am
#4
BE Enthusiast
Joined: Mar 2008
Posts: 968
Re: What's with the kiwi $?
Overnight Markets
Global recession fears and associated risk aversion are overwhelming market sentiment at the moment. It has become a real shocker with doom and gloom motivation in all directions. Equity markets are a little mixed with Asians all down after weaker than expected Japanese export data, Europeans sharing red and blue ink, but the US markets are in negative after more job losses for major US companies, a bleak outlook for auto makers. Should it be reported the Dow was in negative territory but in the witching hour period there has seen a sharp rally back into positive (from -100 to +27, and even as this sentence is being written in a matter of seconds the Dow us now -48)
Speculation is for 200k of job losses this month alone - General Motors is planning involuntary cuts in it's workforce, Chrysler looks like shedding 2000 jobs, Goldmans over 3000, Xerox is cutting staff, to mention just some major US Corporations either having announced staff cuts or planning them. The gloom in the auto industry is not restricted to the US either - Daimler and Hyundai are amongst global companies expecting a very bleak 2009.
NZD has been wobbling around, mostly on a down trend. The rate cut announced yesterday was built in and actually sent the NZD initially higher as disappointment from some quarters that the cut was not more spilled into a short buying spree. However global market issues soon had the rate cut lost in the gloom of recession and has seen the currency trade as low as 0.5797. AUD is equally troubled, especially as commodities have tumbled. All metals and oil are just collapsing. Not long ago gold was at $950 and oil at $150 - now we are seeing $712 and $67 respectively.
Today's Market
The work is cut out for Governments, Central Banks, and Financial Agencies such as the IMF and World Bank to stitch all this back together again. Gloom and doom is just totally saturating markets and undermining investor confidence. Greenspan is taking a bashing for the problems as inevitably a scapegoat is considered. Greenspan himself said he is shocked at the breakdown in US credit markets and has admitted partial blame resisting regulating some securities.
The irrational behaviour of all markets stemming from the severe credit crunch, and recession fears looks unlikely to change for the foreseeable future.
As this commentary continues to be written, the Dow collapsed to -100, and is now at +131 with NZD recovering to 0.5900. For the local population - tax cuts, better fuel prices, and lower mortgage rates provide a glimmer of hope, and while a global recession will inevitably bite here, the food bowl of the South Pacific may ride through it in reasonable shape - primary exporters benefiting from the dip in the NZD.
Again a reminder: We will be closed Monday 27th for Labour Day.
Global recession fears and associated risk aversion are overwhelming market sentiment at the moment. It has become a real shocker with doom and gloom motivation in all directions. Equity markets are a little mixed with Asians all down after weaker than expected Japanese export data, Europeans sharing red and blue ink, but the US markets are in negative after more job losses for major US companies, a bleak outlook for auto makers. Should it be reported the Dow was in negative territory but in the witching hour period there has seen a sharp rally back into positive (from -100 to +27, and even as this sentence is being written in a matter of seconds the Dow us now -48)
Speculation is for 200k of job losses this month alone - General Motors is planning involuntary cuts in it's workforce, Chrysler looks like shedding 2000 jobs, Goldmans over 3000, Xerox is cutting staff, to mention just some major US Corporations either having announced staff cuts or planning them. The gloom in the auto industry is not restricted to the US either - Daimler and Hyundai are amongst global companies expecting a very bleak 2009.
NZD has been wobbling around, mostly on a down trend. The rate cut announced yesterday was built in and actually sent the NZD initially higher as disappointment from some quarters that the cut was not more spilled into a short buying spree. However global market issues soon had the rate cut lost in the gloom of recession and has seen the currency trade as low as 0.5797. AUD is equally troubled, especially as commodities have tumbled. All metals and oil are just collapsing. Not long ago gold was at $950 and oil at $150 - now we are seeing $712 and $67 respectively.
Today's Market
The work is cut out for Governments, Central Banks, and Financial Agencies such as the IMF and World Bank to stitch all this back together again. Gloom and doom is just totally saturating markets and undermining investor confidence. Greenspan is taking a bashing for the problems as inevitably a scapegoat is considered. Greenspan himself said he is shocked at the breakdown in US credit markets and has admitted partial blame resisting regulating some securities.
The irrational behaviour of all markets stemming from the severe credit crunch, and recession fears looks unlikely to change for the foreseeable future.
As this commentary continues to be written, the Dow collapsed to -100, and is now at +131 with NZD recovering to 0.5900. For the local population - tax cuts, better fuel prices, and lower mortgage rates provide a glimmer of hope, and while a global recession will inevitably bite here, the food bowl of the South Pacific may ride through it in reasonable shape - primary exporters benefiting from the dip in the NZD.
Again a reminder: We will be closed Monday 27th for Labour Day.
Does all that info actually provide any useful info for anybody???
Oct 24th 2008, 6:15 am
#5
Here in Dunedin
Joined: May 2003
Location: Dunedin
Posts: 1,975
Re: What's with the kiwi $?
Basically the 1% cut was widely predicted and therfore already factored in the rate from several weeks ago. I also think the carry trade and fx/interest rate parity rules are taking a back seat right now and everyone is focusing on other things like stability and long term growth.
Oct 24th 2008, 8:09 am
#6
Forum Regular
Joined: Jan 2007
Location: Glasgow for now - BOP next few months
Posts: 150
Re: What's with the kiwi $?
I reckon the interest rate cut is still to take affect.
However, the pound is falling fast as GB (gordon brown) has finally admitted there is a recession in the UK so folk are scared and selling their UK pouinds, flooding the market with them and therefore lowering the strength of the pound.
The fact that there is a world wide recession may dawn on the global market soon (they know it but can't bring themselves to admit it - fear begats fear type thing).
Once that happens the pound may buy more NZ$s
Fingers crossed - though long term we don't really want a weak NZ$ - just long enough for us all to change our pounds!!
However, the pound is falling fast as GB (gordon brown) has finally admitted there is a recession in the UK so folk are scared and selling their UK pouinds, flooding the market with them and therefore lowering the strength of the pound.
The fact that there is a world wide recession may dawn on the global market soon (they know it but can't bring themselves to admit it - fear begats fear type thing).
Once that happens the pound may buy more NZ$s
Fingers crossed - though long term we don't really want a weak NZ$ - just long enough for us all to change our pounds!!
Oct 24th 2008, 9:31 am
#7
BE Enthusiast
Joined: Mar 2005
Posts: 613
Re: What's with the kiwi $?
Genesis, the pound is very weak at the moment hence you still can't buy much with it. The NZ dollar is coming down and will eventually get much weaker I believe, but it's the pound which is causing the trouble at the moment.
Oct 24th 2008, 9:31 am
#8
Forum Regular
Joined: Jul 2008
Location: From Devon, England - Now Timaru, New Zealand
Posts: 45
Re: What's with the kiwi $?
I reckon the interest rate cut is still to take affect.
However, the pound is falling fast as GB (gordon brown) has finally admitted there is a recession in the UK so folk are scared and selling their UK pouinds, flooding the market with them and therefore lowering the strength of the pound.
The fact that there is a world wide recession may dawn on the global market soon (they know it but can't bring themselves to admit it - fear begats fear type thing).
Once that happens the pound may buy more NZ$s
Fingers crossed - though long term we don't really want a weak NZ$ - just long enough for us all to change our pounds!!
However, the pound is falling fast as GB (gordon brown) has finally admitted there is a recession in the UK so folk are scared and selling their UK pouinds, flooding the market with them and therefore lowering the strength of the pound.
The fact that there is a world wide recession may dawn on the global market soon (they know it but can't bring themselves to admit it - fear begats fear type thing).
Once that happens the pound may buy more NZ$s
Fingers crossed - though long term we don't really want a weak NZ$ - just long enough for us all to change our pounds!!
Difficult! we decided before we came out here that we had a certain rate we would be happy to exchange at and anything above that would be a bonus. Once you've converted though - never look at the rate again!!!!!!
by the way alot of the problem in the UK is confidence cos the media protray doom and gloom, I've seen their efforts ruin my industry (estate agency). Doesn't seem to happen here in NZ, the front page still consists of dairy sheds, kids and generally good things. They don't dwell on the gloom which helps...
Last edited by kayos; Oct 24th 2008 at 9:36 am. Reason: thought of something else!
Oct 24th 2008, 11:18 am
#9
Forum Regular
Joined: Jun 2008
Posts: 87
Re: What's with the kiwi $?
The kiwi dollar will continue to fall in value against the Yen and US dollar. This is because the interest rate difference between low-yielding currencies (Yen, US dollar, Swiss Franc) and the NZ dollar is falling. Last week, an investor could borrow Japanese Yen at around 0.5% interest and invest the money in NZ dollars at 7.5% interest. This process is called the 'carry trade'.
As the world heads into recession, central banks are cutting interest rates. The Japanese central bank can't cut rates much, but the RBNZ can cut rates dramatically. As the difference in interest rates between the Yen & the NZ dollar falls, more and more investors abandon their carry trades, money flows from NZ dollars into Yen, and the NZ dollar falls.
As the world heads into recession, central banks are cutting interest rates. The Japanese central bank can't cut rates much, but the RBNZ can cut rates dramatically. As the difference in interest rates between the Yen & the NZ dollar falls, more and more investors abandon their carry trades, money flows from NZ dollars into Yen, and the NZ dollar falls.
