NZ Dollar watch

karltsmith · Posted: Sat Feb 14, 2004 1:56 am Post subject: NZ Dollar watch

I thought we might all benefit from monitoring the changing fortunes of the NZ dollar over the next few months.....don'y know if this qualifies as being included in THE PRICE OF THINGS IN NZ...you can't get more fundamental than the dollar itself!!!! Razz

I'll start the ball rolling with an extract from the NZ treasury website!

karltsmith · Posted: Sat Feb 14, 2004 2:02 am Post subject:

NZ Treasury report:

http://www.treasury.govt.nz/forecasts/befu/2002/addforecasttables.asp

BBC News. GBP/NZ Dollar 12 month chart...interactive..realtime.

http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/currency/default.stm

Silversmith · I'll Hang Around A Little Joined: 19 Nov 2003 Posts: 32

Thanks Karl

With the dollar issue being, i would imagine at the forefront in peoples thoughts, its increadibly helpful that this NZ dollar watch has started. I quickly check XE.com from time to time but cannot go hunting in any great depth for the stories and analysis behind this sorry dollar state. If you dont mind looking and giving us feedback on stories, predictions and expectations, for those of us who havent got the time to go into such detail as youself it would be greatly appreciated if by no-one else other than me!
Cheers mate

karltsmith · Posted: Sat Feb 14, 2004 3:24 am Post subject:

My pleasure but I would add the caveat that I am not a professional in these matters only an interested amateur! Nutcase

If we have some financial guru's among us to comment this would also be welcome but I will check the forecast and report back!

Nice One

JCM · Posted: Sun Feb 22, 2004 8:05 pm Post subject:

I see the NZ Finance Minister, Michael Cullen, tried to talk the NZ$ down. The response, against the UKPound at any rate, seems to been for it to rise. Mr. Green

The quote just now is NZ$1 buys 37.7 pence. Or UKP 1 = NZ$2.65

Kiwi dips after Cullen intervention comments spook market
20 February 2004

The New Zealand dollar took a dive in late trading today after comments by Finance Minister Michael Cullen on Reserve Bank intervention spooked the currency market.

The kiwi had been trading up at US70.35c, not far from seven year highs, but it slid back to US69.83c at 5pm after Dr Cullen gave his strongest hint yet that he favoured the central bank intervening to curb the rampant currency.

Dr Cullen told Dow Jones Newswires the Reserve Bank was concerned about the relatively low level of its foreign exchange reserves by international standards.

Treasury and the bank will report in three or four weeks.

He also hinted at direct intervention in the market, saying that if the policy of non intervention changed, then the Reserve Bank's approach would be similar to that of its Australian counterpart.

"The RBA has two different approaches, one is what it calls replenishing its reserves, and the second is where they intervene. I think it would be sensible that the Reserve Bank of New Zealand would operate in a similar fashion," Dr Cullen said.........................................................

http://www.stuff.co.nz/stuff/0,2106,2821228a6023,00.html

JCM · Posted: Tue Apr 20, 2004 2:18 pm Post subject:

So, two months on, the NZ$ is a bit weaker.

1.00 UKP now buys $2.81.

1 NZ$ buys 35.5 pence.

karltsmith · Posted: Tue Apr 20, 2004 8:16 pm Post subject:

My gut feel is that it will weaken further to perhaps 2.84/5 to £1.00 withing the next month ..only a guess but the trend is moving slowly in favour of the £.

karltsmith · Posted: Tue Apr 20, 2004 8:26 pm Post subject:

March Economic Update....

RBNZ Keeps Interest Rates Unchanged at 5.25%

Closer to home, the RBNZ kept interest rates unchanged at 5.25% following the release of their March Monetary Policy Statement. While the RBNZ noted that "the latest activity indicators remain quite robust" they now emphasise that growth will slow in NZ "due mainly to the lagged effects of the high NZ dollar and an expected slowdown in population growth".

Looking ahead, the Reserve Bank's latest projections reinforce just how dependent their assessment of the NZ economy is to movements in the exchange rate. After noting in January that the rise in the NZ dollar "has not had much effect on spending in the local economy" they have now lowered their economic forecasts on the back of currency strength.

This rather dramatic reassessment has lead the bank to "adopt a wait and see" approach and keep rates on hold. While they note that a "further small increase in interest rates will be required this year", it will be largely dependent on currency movements, with a flat profile for rates over this year now looking to be the most likely option over the remainder of this year.

Even assuming that interest rates are moving higher, it appears reasonably clear that any upward move will be modest, with this interest rate cycle notable for the relatively low peak in domestic interest rates this time around.

Regards Karl

karltsmith · Posted: Mon Apr 26, 2004 8:06 pm Post subject:

Well I don't want to say I told you so but I told you so!

The NZD is currently (26/04/04) trading at NZD 2.8417 = 1GBP!

Sooner than I expected but good news for UK migrants! This means you should be able to get 2.82/2.83 via your broker/bank!!

It might go further so iminent migrants with liquid assets take note!

Silversmith · I'll Hang Around A Little Joined: 19 Nov 2003 Posts: 32

This is fantastic news, im watching the dollar rate very closely! Its still such a gamble when to say right lets go for it and exchange money!?Perhaps changing a little at a time may be the way to go? You never know we could be on the way back to the glory days of $3-£1!!!

karltsmith · Posted: Tue Apr 27, 2004 9:47 pm Post subject:

New Zealand Herald Report 27/04/04

Currency: Kiwi grinds lower in tandem with euro

27.04.2004 5.33 pm Kiwi grinds lower in tandem with euro
Gains in the New Zealand dollar early this morning were slowly eroded throughout the rest of the local trading session.

At 5pm in Wellington the kiwi was buying US62.83c from US62.60c at 5pm yesterday and US63.06c at 8.30am this morning.

The aussie was at US73.30c at 5pm (US73.05c last night).

The kiwi started out today with a "hiss and a roar" according to BNZ currency strategist Sue Trinh and had a steady grind down as it tracked the euro lower.

The euro had big gains overnight following an unexpected rise in a German business shadow.

But Ms Trinh said there seemed to have been some profit taking from those gains today, which reversed much the rises.

"We're seeing a lot of to-ing and fro-ing lately... What happens in one session can be reversed in the next," Ms Trinh said.

Overnight she said the kiwi was likely to face resistance at US63.25c and initial support at US62.60c.

"But really the big one to keep an eye on is around the US61.95c-US62c figure area. If that gives way then you'll probably see a much deeper pullback in the kiwi."

The market is waiting on the Reserve Bank's official cash rate review on Thursday morning.

Economists are divided on whether the bank will raise rates by a quarter of a percentage point or leave them unchanged at 5.25 per cent.

On the international data front the US is releasing its latest consumer confidence figures overnight.

At 5pm the greenback was buying 108.57 yen (108.93), and the euro was buying US$1.1838 (US$1.1794).

On the crosses, the kiwi was buying A85.77c (A85.70c), 0.53.06 euro (0.5308), 35.18 British pence (35.30), 68.20 yen (68.19), and 0.8232 Swiss francs (0.8256).

The trade-weighted index was at 63.84 (63.75), while the monetary conditions index was at plus 424 (414).

On the debt market, 90-day bank bill yields were at 5.67 per cent (5.63 per cent).

The February 2006 yields were at 5.62 per cent (5.63), July 2009s were at 5.93 per cent (5.95) and April 2013s were at 6.11 per cent (6.14).

- NZPA

karltsmith · Posted: Fri Apr 30, 2004 3:04 am Post subject:

NZ Herald 29/04/04 - OUR 10th Wedding Anniversary!!!! Nutcase

Currency: NZ dollar drifts lower after RBNZ lifts OCR
29.04.2004 6.50 pm

The New Zealand dollar drifted lower throughout today's session after the Reserve Bank of New Zealand (RBNZ) lifted its official cash rate this morning.

At 5pm, the kiwi was fetching US61.96c (from US63.00c at the same time yesterday), having traded between US62.45c and US61.76c today. It opened at US62.15c.

The Australian dollar was at US71.97c (US73.40c).

BNZ currency strategist Sue Trinh said the RBNZ's move to lift the OCR by 25 basis points to 5.50 per cent initially saw the kiwi tiptoe higher.

"But those gains were quickly surrendered as the US dollar remained a dominant driver in the kiwi," Ms Trinh told NZPA today.

"The kiwi has been drifting lower throughout the course of the day," she said, noting that RBNZ governor Alan Bollard had also said further rates rises were on the cards.

"The interest rate hike actually supported the kiwi on the kiwi-aussie cross, so that's about 10 to 20 points higher," she said.

At 5pm, the kiwi was buying A86.10c (A85.83c), from A86.14c at 8.30am.

Looking ahead, key data out of the US was likely to affect the kiwi's trend in coming sessions.

Among the figures due is one for US first quarter gross domestic product, out tonight, and the US Federal Reserve's benchmark interest rate review on May 4.

"You could argue that the US dollar's resurgence throughout the past 24 hours has been attributed to upbeat expectations," Ms Trinh said.

Meanwhile, the greenback was buying 110.21 yen (109.03), and the euro was buying US$1.1835 (US$1.1938).

On the crosses, the kiwi was buying 0.5236 euro (0.5276), 35.00 British pence (35.08), [THATS 2.85=£1] 68.29 yen (68.67), and 0.8095 Swiss francs (0.8166).

The trade-weighted index was at 63.38 (63.89), while the monetary conditions index was at plus 397 (428).

On the debt market, 90-day bank bill yields were at 5.78 per cent (5.67).

The February 2006 yields were at 5.74 per cent (5.61), July 2009s were at 6.02 per cent (5.90), and April 2013s were at 6.18 per cent (6.07).

- NZPA

Steven & Ann · Testing The Water Joined: 26 Apr 2004 Posts: 7

Happy Anniversary Karl and Mrs Karl Clapping

- it's amazing how fast the years go by, isn't it? Rolling Eyes

Ann

karltsmith · Posted: Fri Apr 30, 2004 8:46 am Post subject:

Thanks Steven, Anne and Tanya for the card! Mrs Karl is Helen by the way! Clink

John Miller · Posted: Wed Jul 14, 2004 6:27 am Post subject:

Kiwi tipped to soar again
14 July 2004
By KAREN CHAN

Batten down the hatches: The New Zealand dollar is believed to be on its way back to US70 cents in the next few months.

But opinions are divided as to whether it will still be trading at those heights a year from now - or might have slumped as low as US55c.

The Kiwi opened at a three-month high of US66.13c yesterday after peaking at US66.24c overnight.

"It has been on a move higher ever since we had some pretty weak economic data come out of the United States," Westpac chief currency dealer Basil Payn said.

The US dollar slide had boosted a raft of key currencies, but investors were aiming at high-yielding currencies such as the Kiwi given the prospects for an increasing gap between rising New Zealand interest rates and lower rates in the US.

In recent weeks better-than-expected New Zealand economic data and strong commodity prices had also driven the Kiwi dollar higher.

"There have been a whole range of factors - the low current account deficit at a time of relatively high deficits in the US and Australia, the interest rate risk in New Zealand is upward in a strongly growing and resource-constrained market, and commodity prices are up 26 per cent from a year ago," BNZ chief economist Tony Alexander said.

The New Zealand dollar was back down around US65.75c by the end of the day, but economists predicted the respite would be temporary.

"Chances are in the short term it is going to go higher and we could go back to US70c again," Mr Alexander said. Others agreed. That would take it back toward the US71c-plus levels seen in February, the highest since 1997 - though it was not expected to break that ceiling in its latest rally.

But looking further ahead views differed sharply. Mr Alexander picked US60c to US62c for the dollar in a year, while Westpac predicted a fall to US55c over that period as the interest rate gap eased, the US economy improved and New Zealand's economic performance flattened out.

But Deutsche Bank senior economist Darren Gibbs said the local economy was not showing any signs it would be weak enough to collapse the currency to US55c within a year.

"Our view is that the currency will go higher in the next 12 months, which reflects a key view that the US dollar will weaken further," he said.

Deutsche Bank believed the Kiwi would be as high as US70c in a year.

http://www.stuff.co.nz/stuff/0,2106,2970976a13,00.html