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NZ$ dips briefly below 70 US cents
A growing belief that New Zealand's interest rates are dropping along with its economy has taken its toll on the New Zealand dollar in Friday afternoon trade. The New Zealand dollar hit a fresh 10 and a half month low of just under 70 US cents in late trade before blipping back up to 70.1 US cents. The New Zealand dollar has now fallen almost 10% since the Reserve Bank surprised many on July 24 by cutting the Official Cash Rate to 8% from 8.25% and indicating further cuts were possible later this year, "provided the inflation outlook continues to improve and there is no excessive exchange rate depreciation." How much is excessive? You have to wonder too how much of a factor in the Reserve Bank's thinking its own NZ$3.7 billion short position in the New Zealand dollar, which tends to work against its stated aim of making sure the currency doesn't fall too fast and boost inflation. See a NBR article for more detail on this.
7 Comments
Like someones pulled the plug.Will
Like someones pulled the plug.Will this damage our countries credibility? I think so.
From the NBR article: ...it
From the NBR article:
...it sold off another $511 million in May this year, when the dollar briefly peaked near US80c
That's a cool US$50m profit in just over three months - if they ever start selling shares I'm buying. Let's not forget that carry traders are pure speculators and are not interested in "investing" in our economy in the true sense of the word. If such tactics by the RBNZ make the NZD a less attractive play thing for speculators I'm all for it.
I am not sure you
I am not sure you will be all for it if the NZ$ plunges through .65, .6 and then .55 at a rate of knots. The imported inflation will be eye-watering. We run a staggering trade deficit, so all that inflation that has been kept at bay.........
Kiwis have been oblivious to the 'good' side of a high dollar, as only the 'bad' side of it has been emphasised.
I think this latest mini-run is partly a result of the markets re-assessing NZ as largely a commodities based economy, and as Asia is seen to be slowing rapidly (talk on Bloomberg today of Japanese recession) those much fabled Asian export markets that are supposidly going to make our economy shine next year are very much at risk (and the Aussie economy, our biggest partner, may also be on the turn).
At what rate of descent and at what level does Bollard start to back-track?
Also talk today off collapsing
Also talk today off collapsing commodities including agricultural ones. time to buckle up and keep your head down. Corn back from 7.50 to 5.00 wheat from 12.50 to 7.50 increasing ag production into a recession suddenly dosnt look so smart. Iceland here we come
[...] sitting there while they
[...] sitting there while they wait for the drop so that they get more Kiwi $ to buy a home with. Now the exchange rate is [...]
Bear in mind in the
Bear in mind in the year 2000, the NZD was at 0.39 to the USD - but we're all still here!
Well, well finally those with
Well, well finally those with integrity within our are government have decided to attempt to regain the sovereignty of our nation state from the International Commercial Aristocracy(ICA) and their Locally Recruited Co-operatives(LRC), "short selling" our dollar while going against their(IMF) insistence that we should raise our interest rates and actually surprisingly lowering them, thus as our currency falls because it is no longer a manipulated lamb, will see the profits offset our insynctly increasing debt obligations to the ICA, thus our exporters and our balance of payments will truly benefit and not see the excess credit driven inflation smashed by the normal means of ramping up interest rates, that delivers the real sector to poverty and all the hard assets back to the privately owned corporate central banks at cents on the dollar to the "Created Credit' they had loaned out at interest for the real sector to buy them. It is the beginning of a "Bank Battle" in every sense, hence the recent disconnect between the RBNZ and the foreign influenced NZDMO and Treasury, all that needs to be done now, is have the basically decent majority of this nation let in on the "Game", a game that will not be won until we remove the privately owned central banks from "Creating" our money supply and loaning it to us at interest.
It was great to hear the NZ and Australian Governments tell the Commercial banking sector to follow the OCR or their will be consequences.
Cheers
Iain
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