[Tia Maria]

The Kiwi Dollar rose due to S&P upgraded rating yesterday, does everyone think it will rise further?

http://www.stuff.co.nz/business/2455824/Kiwi-boosted-by-S-P-upgrade

Cheers

Tia

[Ramo]

Sorry to be a pedant, but S&P revised it's outlook on NZ's credit rating from negative to stable - NZ foreign currency credit rating is already AAA rated and cannot go any higher.

On the issue of the currency, plenty of people in the Foreign Currency markets are talking about it possible reaching 65c US to the NZ dollar - mostly based on 'technicals', essentially analysis based on past trends.

Fundamentally the US dollar is undergoing a weakening across ALL currencies, mostly on the fear that their Quantitative Easing programme (that is printing money to stoke borrowing and inflation in their economy) will devalue the US dollar hence the recent outflow. Whether this trend continues is debatable as an alternative explanation for US dollar weakness is strong risk appetite worldwide, which also tends to weaken the US dollar - though notable Gold is still going a lot higher which is normally correlated with lower risk appetite!

It's all a bit mad right now!

[James 1077]

Sorry to be a pedant, but S&P revised it's outlook on NZ's credit rating from negative to stable - NZ foreign currency credit rating is already AAA rated and cannot go any higher.


I thought that it was AA+?




Fundamentally the US dollar is undergoing a weakening across ALL currencies, mostly on the fear that their Quantitative Easing programme (that is printing money to stoke borrowing and inflation in their economy) will devalue the US dollar hence the recent outflow. Whether this trend continues is debatable as an alternative explanation for US dollar weakness is strong risk appetite worldwide, which also tends to weaken the US dollar - though notable Gold is still going a lot higher which is normally correlated with lower risk appetite!


It should probably be noted that something similar will, IMHO, happen with GBP for similar reasons. The Bank of England have shifted their pension investments into assets that perform well in high inflation times - which makes me think that they are expecting high inflation - this will therefore weaken the currency further.

[Ramo]

I thought that it was AA+?

That's NZ domestic government bond rating, which is different from its Foreign Currency debt rating which is AAA. I was surprised to find it differed too, but according to an ex-credit risk analyst I spoke to, I believe there's differences between rating agencies. Check the attached. Go figure :confused:

[Rusty]

I will give you the answer I got when talking to a currency trader at ANZ the other day. They are expecting te Kiwi to drop lower later in the year, long estimates against US are 45-50c. Also, most MP's and others in the economy are starting to realise that NZ needs to export more to get the trade deficit down and a lower dollar is needed to do this.
Having said all this, it is still mostly a guess on what happens with other countries.
Hope that helps a bit.

[Ramo]

It closed trading on Friday US time at 64 US cents to the NZ dollar :exit

[GrumpyGoat]

It closed trading on Friday US time at 64 US cents to the NZ dollar :exit

Kiwi $ rising or American $ falling??

[Ramo]

kiwi $ rising.

so anz's numbers from rusty's post suggest it will fall very fast later this year, however for the time being, it's been trading higher and higher over the last few weeks.

[mmcguire2020]

I hope it stays like this as it is easier to pay my US debts on my NZ salary:nice1 I was struggling for some time especially when it was at $1.88.:wah

[Ramo]

Kiwi has now traded 65c US dollars. That is, for a kiwi dollar, you can get 65 US cents.

happy mccguire ;)