Don

Any views on where the NZD is going? I reckon it has just about peaked in general but of course it depends which currency you are comparing it to and what happens to that second currency over the next year or so.

Vs GBP - I reckon NZD might decline a little. Central Bank might put up NZ interest rates another half point, but BOE might increase UK interest rates by a quarter point or so in H2 this year.

Vs AUD - NZD to decline. Movement of last year to be reversed as AUD economy rebounds.

Vs USD - NZD?

I'm worried about the NZ economy/ increasing unemployment.

Also, less incentive to buy NZD for carry trades as USD interest rates come back up.

deedee

Hi Don, hows things?Well in reply to your comments there i don't join you in your feelings.I think we will see a very soft landing, no real fall in anything only a cooling off period for a few years.I don't think the NZ dollar is going to see any significant falls either in the next 18 months or so.I do however see the UK pound a little over valued still and trouble brewing on the horizon for all in Blighty.My crystal ball says so it must be right.
All subject to foot and mouth been genuine in NZ, in which case we're all screwed here, good and proper!(shiver the thought)
Houses may be taking a smidgen longer to sell here but prices are not going backwards on the whole.A real estate agent friend who deals in very large numbers in Wellington also said there is no cool off yet on his shore and lets face it, its the capital(yeah i know, only in name)

Don

Are we heading for a major economic slowdown?

Possibly. The slowdown in consumer spending over the past six months has not had a major impact on the economy because of growth in services and demand for UK goods overseas, even though this has not been helped by the weak dollar.

What is worrying economists are signs that the economy globally is starting to weaken. Rapid and steep rises in the cost of crude oil are feared, since it was this that caused a global recession in the 1970s.

Growth in the eurozone - the UK’s largest trading partner - remains sluggish, while fears are growing over the size of budget deficits in the United States and whether China can maintain its economic expansion.

http://business.timesonline.co.uk/ar...6362_2,00.html

Deadmeat

Buy cheaper wine, problem sorted.

Don

Hi Deedee, things are OK thanks with summer heat just getting switched on - 21C today and sunny. Just built a higher wall around the newly-acquired pool to make it kidsafe and worked out yesterday how the pump works! First filling programmed for Thursday after the gate gets put in. Then we will see if my patented heating system works - pump #2 bought for GBP25 and 100 metres of dark green hosepipe to heat in the sun!

I hope it is a soft landing, at least F&M seems just a scare thank goodness.

Hopefully the good stuff will still carry on selling, which would at least justify paying a premium for the low/ mid-range 'average' house we bought in Dunedin but in a good street in a good area.

Hope you're doing fine, is your farm certified organic yet?

Don

Hi Deadmeat, not a problem in NZ with good Aussie reds for NZD6.99 on special and plonk here for GBP3-4 for 3 litres.

Sticking to the occasional beer, myself.

How's the baby? Ours is up to about 5.5 kilos now and getting her proper hair, she was born with a huge amount of dark hair but is a blondie underneath just like her dad was until 'the drop'.

Don

May 16 - Close: NZ dollar sinks against greenback

16 May 2005
The New Zealand dollar today sank lower against the United States dollar, losing almost a full cent against it in the past 24 hours, a currency dealer said.


At 5pm, the kiwi was at US70.75c, having finished Friday's session 87 basis points higher at US71.62c.

It began today's session at US71.23c, and ranged between US70.63c and US61.29c.

A National Bank currency dealer said the kiwi was sold-off by offshore investors, who were instead snapping up United States currency.

"The US dollar is strengthening against a range of currencies and commodities as well," the dealer told NZPA today.

"It's (the falling kiwi-US dollar cross) going to gain momentum. It's been all one-way traffic today, and it's the same with the Australian dollar," he said.

"There's big selling (of the New Zealand dollar) out of China."

The dealer picked the kiwi to fall to about US66c in coming months. The kiwi-US cross had peaked in March, the dealer said.

"I think the kiwi is on the verge of pretty large sort of decline... (at the moment) we're hitting up a very important support level, which will break," the dealer said.

This appeared consistent with the greenback overnight climbing to a seven-month high against the euro and three-month peaks versus the Swiss franc and sterling on recent robust data.

Meanwhile, against the aussie, the kiwi was buying A93.43c (A93.65c at 5pm on Friday).

On its other crosses the kiwi was buying 0.5612 euro (0.5653), 76.15 yen (76.52), 38.28 British pence (38.40), and 0.8670 Swiss francs (0.8716).

Biddy

So Don - given that we can buy roughly $2.6 to the pound - will I be able to by more or less dollars in a few months time?
Only your views - I wont sue or anything if you're wrong!

Don

I wish I knew the answer.

I am toying with the idea of doing a forward buy quite soon, ie sell NZD and buy GBP, on a least part of the value of my assets in NZ. (Thinking about selling our NZ house.) Because $2.6 is very good, historically and I'd be happy to just get certainty, and wouldn't cry in my beer if I missed out on another few % of improvement.

So, does that help you? Basically I am worried the NZD will get weaker faster than the GBP.

Biddy

Nope - doesn't help me! I'm getting weaker faster too.

Paladin

Hi Biddy,

For my work I manage investments from a technical analysis/charting perspective so I'll give you my 2 cents worth from what I can see from the charts available on HIFX.co.uk:-

Very basic background info:-
Foreign currency dealers love to speculate versus technical chart patterns ie you will often see periods of price rises or falls followed by the opposite to levels of 1/3, 2/3, 1/2, of the prior move. This is also often seen to what are called Fibonnacci Retracement levels(38.2% and 61.8% retracements). If a currency rebounds all the way then they often blow by past highs or lows by these same sort of ratios(Fibonnacci extensions).

The NZ$ has strenghtened vs the £ down to an area just below 2/3 retracement from the near term low of +/-$3.70 from the high of +/-$2.20. Therefore I would expect to see consolidation around the $2.70 area. What is worrying is the consolidation occuring under that level around 2.55-2.70 area which may indicate that 2.70 is now an area of resistance for the £ and that we should expect the $ to strengthen further to possible retest the 2.20 level from 1996!!!!

From a fundamental standpoint it feels like the potential is starting to lean towards a UK rate drop than increase although still finely balanced. NZ has higher base rates and may be a little behind the UK in the rate cycle(??), ie more possibility of rate hike in NZ than UK......(DON, WHAT DO YOU THINK???), therefore possibly leading to a conclusion NZ$ could strenghten more vs. the UK£.

Just one viewpoint!

Dave

Biddy

Very interesting.........but could you do it again in English and less than 20 words please - some of use are just plain stupid!

Paladin

The exchange rate for us in UK wanting to buy NZ$ may get worse before it gets better, :scared:

Dave

Biddy

That's better!!!!!!!!
Any idea how long before it gets better
a) A few months
b) about a year
c) a long time!

Paladin

Not without a crystal ball!!!

if I was THAT good I'd be a millionaire LOL!!!

Dave