NZ dollar hits a ten year low vs the US dollar

Currencies

Our currency takes a hit on rumours that Covid-19 has arrived. Wholesale swap rates sink as well

28th Feb 20, 5:33pm by David Chaston

Since the admission that New Zealand likely has its first coronavirus case, the New Zealand dollar has fallen sharply.

In addition, wholesale swap rates tumbled further late in the day. The day's closing rates are here.

All eyes will be on the global situation tomorrow, and the key markets to watch will be Wall Street equities (S&P500) and benchmark bond yields (UST 10yr).

You can watch the current exchange rate on our live feed here.

Since hitting that low point, the Kiwi dollar has made a small bounce-back.

Wholesale swap rates are now at low levels but still not at all-time lows which were reached in October 2019. But we are close. In fact, the one year swap rate now equals that low benchmark.

We will update this article if major changes happen overnight, but the main update will be the Weekend Briefing tomorrow. Our briefings won't deal with medical, public health, border control or bio-security issues; rather we will focus on financial and economic issues and repercussions.

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53 Comments

by Andrewj | 28th Feb 20, 5:42pm 1582864977

confirmed
https://www.stuff.co.nz/national/health/119899280/ministry-of-health-gi…

by Audaxes | 28th Feb 20, 6:07pm 1582866444

The Government has also signed off on a $1 million fund available to key regions most affected by the travel restrictions put in place for Chinese visitors as a result of the coronavirus, such as Auckland, Rotorua, Queenstown and Christchurch.

I guess this effective bank subsidy will not cover the costs attributed to the indebted Airbnb industry.

by Henry_Tull | 28th Feb 20, 9:06pm 1582877197

Or fund the panick buying in most supermarkets right now (9:00pm).
Staff in Auckland park n save saying they are incredibly busy since 5pm.

Staff are telling people be quick or be last as doors close 9:30 pm.

by dazz | 28th Feb 20, 5:46pm 1582865212

Could you kindly check those links to currency rates David. Both taking me elsewhere

by custard | 28th Feb 20, 5:51pm 1582865487

Try....

https://www.fxstreet.com/rates-charts/rates

by Sammy D | 28th Feb 20, 5:54pm 1582865691

Dollar turning down again now confirmed.

We must be reaching a point of no near term bounce back on shares, a lot of stops will have been triggered and margin calls being made.

Event horizon beckons...

by custard | 28th Feb 20, 6:20pm 1582867259

Current NZD/USD .6235 - could get hammered overnight or will most aggressive trades have closed out by then - it'd be brave to get in front of this train though.

by Cowpat | 28th Feb 20, 6:03pm 1582866238

Nigeria confirms first case. Undoubtedly WHO will call this a pandemic over the weekend, which will bring into play other matters.. For those foreign buyers fleeing the NZ property market and NZD , auctions should no longer be available.

by Fritz | 28th Feb 20, 7:23pm 1582870992

I think we will start to see Chinese selling up their NZ property, not sure how big the trend will be, depends on how much economic carnage there is in China

by Rob | 29th Feb 20, 12:10am 1582888225

Why would they do that?

by custard | 28th Feb 20, 6:07pm 1582866439

This really could be one monster roller coaster ride – so many highly leveraged positions all becoming unstuck at once – a multitude of players having to exit through an ever shrinking door – no willing parties on the other side of the trade – more volatility – leveraged positions under further stress.

Derivatives, part I = Subprime = GFC.

Now entering part II?

“Warren Buffett once called the instruments "financial weapons of mass destruction." Derivatives had a major role in the financial crisis after instruments used to play the subprime mortgage market collapsed.”

by Sammy D | 28th Feb 20, 6:13pm 1582866839

And all before most consumers are fully aware of what's going on. Just wait until everyone starts pulling out of their indexed funds...

by Masher | 28th Feb 20, 7:45pm 1582872328

Derivitives have us by the curlys.

http://money.visualcapitalist.com/worlds-money-markets-one-visualizatio…

by Nzdan | 28th Feb 20, 6:09pm 1582866559

I'm just recovering from a pretty bad case of the flu. Kept thinking what if it's Wu Flu.

by guwop | 28th Feb 20, 7:22pm 1582870956

If it's the Wu you should buy another house and self-isolate.

by guwop | 28th Feb 20, 6:09pm 1582866598

How are your debt levels looking now TTP/Yvil/Man2?

by Foreign buyer | 28th Feb 20, 8:29pm 1582874968

Tumbleweeds...... They are not laughing now!!!!

by Yvil | 29th Feb 20, 9:33am 1582921985

Thanks for your concern guwop, they are exactly the same as they were yesterday. Why would they be any different? It is likely debt will get cheaper to service though as swap rates are tumbling and the OCR could well be dropping

by Cowpat | 28th Feb 20, 6:16pm 1582867009

ANZ weekly spend Australian airports.
https://twitter.com/Scutty/status/1233166757440811008/photo/1.Just another reason why NZD is doing what its doing

by guwop | 28th Feb 20, 6:17pm 1582867048

Amazing time to buy a New Zealand windbox with its renowned build-in ventilation!

by Andrewj | 28th Feb 20, 6:54pm 1582869281

scary when the virus can mutate and infect dog, it's the mutations that are going to be scary.

https://news.yahoo.com/hong-kong-finds-coronavirus-pet-000857166.html

by Foreign buyer | 28th Feb 20, 8:23pm 1582874635

Thank god dogs are not allowed to be eaten in NZ.

by ShoreThing | 29th Feb 20, 9:43am 1582922587

Sadly not true. In the news a while ago, a pet dog was killed and eaten out in south auckland. Nothing was done because the dog was killed humanely.

by Foreign buyer | 28th Feb 20, 6:59pm 1582869565

So now can you finally admit that the DGM's were correct TTP?

by guwop | 28th Feb 20, 7:16pm 1582870573

He won't because TTP and Man2 are bots. The only real life property bull is Yvil.

by Foreign buyer | 28th Feb 20, 8:17pm 1582874249

Poor TTP. All of his rock solid investments are now in free fall. "But it couldn't happen in NZ, we are different".... hahahaha

by Zachary Smith | 28th Feb 20, 9:57pm 1582880224

One Corona virus case does not a Winter make.

by Alter Ego | 28th Feb 20, 7:50pm 1582872650

America is at mercy of dropping like a stone over priced and over paid things they like to call...Oiling the works of the entire World.

https://finviz.com/futures.ashx

We are just a mere drop in the bucket...Fracking good job that America is isolated from the Corona Virus thingy....or it would affect the entire World and its sick little swaps and shares and the cry for help from the Trump and dump, buy the Dip Brigade.

10% dropsies on Dow.. quick buy the dip with yer Kiwi Dollar, OH....that is another 10% ta everso...

What??? ya got the virus too.....go wash yer hand and yer dollars and take a break for a fortnight...and get back to me.

Purlease.......is this a hidden tax...or what?......or more to the point...a Capital Idea.

by Zachary Smith | 28th Feb 20, 7:23pm 1582871026

Surely we have all been expecting this haven't we? I've been mildly prepping for the last few weeks.

The situation in Iran must be quite bad as many travellers from there appear to be infected.

by Foreign buyer | 28th Feb 20, 7:58pm 1582873092

Jacinda is currently picking an argument with Scott Morrison over Kiwi criminal gang members being deported from Australia. For a start, they are from NZ so Australia has every right to deport them. NZ needs to start targeting gang members instead of letting them destroy and bully communities. She is only doing this so emphatically to try and deflect media attention from her woeful management of the coronavirus. She has left the doors wide open and is now solely responsible for the impending deaths of many New Zealanders.

by Audaxes | 28th Feb 20, 8:02pm 1582873357

https://www.theguardian.com/australia-news/2020/feb/28/jacinda-ardern-l…

by sharetrader | 28th Feb 20, 10:30pm 1582882238

this is a case of two wrong dont make a right, just a big big mess
Jacinda claims they are australians because a lot of them went there very young and grew up in the Australian ecosystem so that makes them Australian
sorry they are still nz citizens unless they became Australian citizens so Australia have every right to send them back
scott claims they are kiwis criminals because they were born here, sorry but if under 5 australia trained and moulded them, they are Australian criminals not nz criminals
i think it should be treated as case by case not a blanket rule
yes send back the ones that arrived there from NZ after the age of 15 and have turned to serious crime, and im not talking about a speeding ticket.
but those that arrived before 5 years old you trained them you deal with them dont dump them back on us without some compensation to NZ to deal with your mess
in-between 5 and 15 each one needs to be looked at as an individual case .
i also think we should be doing the same here and should be a lot harder of immigrants that come here and commit crime after the age of 15, i dont care if they are a resident or citizen if serious enough revoke it and send them home

by Brock Landers | 28th Feb 20, 8:17pm 1582874255

It's a cultural difference. Citizenship means something to Australians. To kiwis it means almost nothing.

by Pragmatist | 28th Feb 20, 10:23pm 1582881827

Indeed, we let them vote here, but no quid pro quo for Kiwis in Oz.

by RickStrauss | 28th Feb 20, 10:01pm 1582880519

Good ideas. If their society has bred the criminals, it's arguable they should take more responsibility than they have been.

by Noncents | 28th Feb 20, 10:44pm 1582883081

They likely will. Watch our "Special Category visa (subclass 444)" disappear, then listen to us Kiwi's really start to whine.

by Foreign buyer | 28th Feb 20, 8:13pm 1582873982

Her ego is going to make Australia cancel all special class visas. Kiwis will have nowhere to escape to when NZ is completely overtaken by all Jacindas new friends she is filling the country up with. She is, dare I say it, becoming even worse than John Key.

by Henry_Tull | 28th Feb 20, 9:13pm 1582877617

Yes the relationship she has with SoMo is a big problem for us.
At times when we need be in lock step, we have a very poor relationship biulder on the NZ side. Medical associations are transtasman.

Shaw & Co carbon shaming of Australia, and Bush fire blaming on Liberals might of made our Wellington wonks feel good about themselves, but strategically stupid.

I am in Auckland now, and people are not happy!!

The prime minister needs demonstrate she can work with the Australians. A nz pm that doesn't, is of no value.

by doubtingthomas | 28th Feb 20, 8:09pm 1582873760

the falling exchange rate is a good thing for the country

by guwop | 28th Feb 20, 8:51pm 1582876291

No it is not.

by doubtingthomas | 28th Feb 20, 8:10pm 1582873835

the falling exchange rate is a good thing for the country

by guwop | 28th Feb 20, 8:51pm 1582876310

No it is not.

by Foreign buyer | 28th Feb 20, 9:15pm 1582877746

Can somebody tell me why Jacinda wants to take in foreign illegal boat migrants out of Australia but she doesn't want to take her own NZ citizens? What is she up to?

by Brock Landers | 28th Feb 20, 9:28pm 1582878502

That's a very interesting point.

And why is Behrouz Boochani still mooching around in our country?

by Keen Observer | 29th Feb 20, 1:02am 1582891358

May be because the push from Green?

by Zachary Smith | 28th Feb 20, 9:56pm 1582880198

I hear reports that PaknSave in Botany is very busy tonight.

by custard | 28th Feb 20, 10:59pm 1582883962

Desperate times - Everyone for themselves?

by Keen Observer | 29th Feb 20, 1:06am 1582891568

Don't worry - in healthcare sectors, we're just standby. It's just a temp glitch - this behaviour, will not affect the bull market.
Market is way more rational than emotive response, market is always driven by calculated risk... super accurate calculation for sure ;-)

by Fritz | 28th Feb 20, 11:09pm 1582884590

huge crowds at my local supermarket tonight, panic buying.
ridiculous, irrational behaviour!
I just wanted to get a bottle of wine....

by custard | 28th Feb 20, 11:20pm 1582885240

ridiculous, irrational behaviour....

Just wondering, any particular grouping?

by Henry_Tull | 29th Feb 20, 8:11am 1582917080

You gotta be aware of the human condition, this happens when people not informed, the community communication has been poor, contrast to the way community in Singapore is informed.

by Keen Observer | 29th Feb 20, 12:59am 1582891190

This will be contained, as Xi ng said. China will stand by NZ, Italy, Japan, South Korea, Croatia, Australia, Switzerland & many more - as we speak China is preparing a mass production of vaccine for the world. Thank you, thank you for generosity towards small nations.. such as.

by guwop | 29th Feb 20, 7:39am 1582915169

Gold getting crushed, as expected.

I will repeat it for the Kiwi gold bugs on here: Gold is not a deflationary hedge!