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90 seconds at 9 am: NZ$1 = US$0.84 TWI - 75.5, world's biggest currency gainer; NZ borrowing jumps; China's investment bubble; US income gains; Congress ignoring budget crunch

Posted in News
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Here's my summary of the key news overnight in 90 seconds at 9 am, including news that our exchange rate firmed markedly overnight starting the new month at 84 USc, with the TWI at 75.5. It is the biggest mover in the world's currency markets in northern hemisphere trading. The rise began following Governor Wheeler's OCR review yesterday.

January started the year with the currency at a high level, and the TWI reached its all time post-float high on January 11 at 75.7. We are up across the board and close to an all-time high against the British pound as well.

Late yesterday afternoon the Reserve Bank released credit data for December and that showed a sharp resurgence in lending for housing and farms. It also showed a significant rush back into fixed rate mortgages. More details here ».

In China, S&P says China is over-investing and is vulnerable to an "investment-led collapse". More that 40% of economic spending there is on infrastructure, factories and housing. Australia and Indonesia are also vulnerable, says S&P.

In the US, initial jobless claims increased by 38,000 to a seasonally adjusted 368,000 in the week ended January 26, but the overall level still signaled a slowly growing labour market. In Decemebr, personal income rose the most in eight years according to a release this morning. But the subsequent payroll tax increases which started in January are definitely putting a damper on US confidence and spending in the new year.

Also, there is almost nothing going on to avert the drastic US budget cuts that are looming - they are not even talking about them in Congress and it seems they are sleepwalking toward a major crunch.

In Britain, banks there face major compensation claims that could total billions of pounds after the regulator found they had widely mis-sold complex interest-rate hedging products to small businesses.

Stocks are down in mid-day trade, and commodities are weaker too, with both oil and gold falling from yesterday.

The New Zealand dollar starts today quite a bit higher at 84.0 USc, 80.5 AUc, with the TWI up to 75.5. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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8 Comments

David , I think it's just

David , I think it's just wonderful for the Wheedler to wake up this morning and see the impact  his phenomial team of strategists have had upon the the NZD.
The forex team on the Wendsday beers shooting the shit over whether or not he'll do something.
he'll do something ..! no he won't....yes he will..won't ...will...won't ahhhhh....
hahahaha ha! you got me again , He did nothing..! ha ha ha, isn't Forex great...!
 Thank God fo Wheedler..! 

Wine exporters apparently

Wine exporters apparently undeterred - read NZ Herald article
 
"New Zealand wines will find their way into more profitable export markets and discount wines will probably be now made from overseas wine."

 yes Stephen H.....I'd guess

 yes Stephen H.....I'd guess when you can make up the export shortfall by dumping stuff on the unsuspecting N.Z. public you wouldn't let you cat drink...(unless your Gareth M of course)  you'd probably be undeterred or some kind of turd anyway.
You know a lot of coversation media wise how we pride ourselves on the quality of our food and drink exports and the lenghts we go to making sure safe levels of contaminants  are achieved.
 You'd have to wonder whether the same level of quality control is applied to most of the garbage we're being served up...I mean you'd have to ...wonder , that is, at some point.

 New Zealand media Icon

 New Zealand media Icon passes....R.I.P. Sir Paul Holmes all the best in the next life to you.. 

New Zealand media Icon

New Zealand media Icon passes.
 
This won't pass with him: “That Kofi Annan” Holmes said “has been a very cheeky darkie overnight. He’s been a very cheeky darkie. It’s all very well giving a darkie that secretary-general job but we’ll only take so much.”
 
What are the exclusion criteria for a knighthood these days? Not much apparently.

I'll try not to evaluate  the

I'll try not to evaluate  the man's life achievements on the basis of a soundbite Stephen, I'm sure Kofi Annan would say similar.  

SpongeBob Squarepants has had

SpongeBob Squarepants has had more hours on TV, playing to the same target demographic, where is his baronetcy?
So embarassing when reporters think they are the news, instead of reporting it.
Happens more and more these days.

I just luv Spongebob...well,

I just luv Spongebob...well, more Patrick really and Squidwort the epitome of dreamers and underachievers.
 
 cheers Moa man !! i'll go pull out a few episodes.....like camping out with the magic conch.