NZD at record highs

Currencies

NZD at record highs in final end-of-week trades

9th Jul 11, 9:37am by David Chaston

The kiwi dollar has finished the week setting a number of record highs.

Against the USD, it ended at a post-float record of NZ$1 = US$0.8372 after US payroll data came in at very disappointing levels. The official data showed that only 18,000 jobs were added in the US in June, far below expectations. Yesterday's parallel and unofficial ADP data suggested that hiring was stronger than it turned out to be, and undermines the credibility of one of these measures - the markets are assuming the official survey is more credible.

This US data not only weakened the US dollar against most currencies, it also caused the oil price to fall and the gold price to rise.

Against the Japanese yen, the kiwi dollar held steady, ending at NZ$1 = Yen 67.48. The Yen is at its strongest against the US dollar in almost 25 years. The quake-currencies are sticking together.

Against the Australian dollar, we ended at NZ$1 = AUD0.7784, which about gets it back to its mid-June position, and back to levels we were at at the beginning of 2011.

Against the euro, we ended at NZ$1 = €0.5875 - a level we were last at in mid January 2011 and which is where the record stands at €0.5899

Against the British pound, NZ$1 = UK£0.5221, a record post-float closing high for the NZ currency.

The Trade Weighted Index (TWI) ended at 72.29, its highest level since March 2008. The all-time TWI high is 76.88 recorded on July 24, 2007.

The PBOC allowed a small appreciation Friday for the yuan against the US dollar, but that means the kiwi dollar appreciated against the Chinese currency, rising to NZ$1 = CNY5.4171, its highest level in over three years. It was last at this level in May 2008.

Oil tumbled about US$1 per barrel on the US jobs data.

Gold rose to end the week in London at US$1,541.50/oz, but has continued climbing in New York and ended at US$1,544.50. Silver followed suit. Copper jumped higher.

The Dow shaved more than 100 points on the jobs news, but then recovered half of that fall by the close of trading in New York.

No chart with that title exists.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

45 Comments

by Kunst | 9th Jul 11, 11:30am 1310167800

Gold hit US$ 2’000.- soon PM.

PM Key says next 20 years could see strongest growth in NZ's history on Asian links.

Considering the current and upcoming worldwide situation/ development, how on earth can a leader (leadership) of the nation tell us such a nonsense ?

Why not make sensible statements and urge the nation to buy gold PM ?

by Neville C | 9th Jul 11, 3:46pm 1310183191

This article from SocGen on the future supports the PM's prediction.

The proposition is that the future will be demand driven and that industry, land & commodities will be in demand.

Will wool go back to the 1950's when wool was about 'a pound a pound', around $4/kg, when an annual income was around $500? A bale was worth one annual income or could buy one car.

http://www.zerohedge.com/article/coming-new-world-order-revolution-how-…

This graph 'Real raw materials prices' shows how small the latest run up in commodities compared with historical prices.

by Kunst | 9th Jul 11, 4:31pm 1310185906

Growth can not continue without severe consequences.

Considering the current and upcoming worldwide economic, financial, social, environmental and political scenario, what wonders me most is the fact, that intelligent people still believe, “The World” is fundamentaly just caring on with pattern experienced in the past.

Neville the world changed forever and is even changing faster every day. I think the SocGen document doesn’t provide a comprehensive outlook.

an overview:

http://en.wikipedia.org/wiki/Risks_to_civilization,_humans_and_planet_Earth

by Kunst | 9th Jul 11, 5:33pm 1310189601

What is currently happening worldwide, I can hardly classify as a cycle, but accumulating and accelerating severe problems on many fronts, resulting in the collapse of human societies.

What our economy needs in the current unusual economic climate, where many unforeseeable, major events are occurring are diversity, quality, sustainability and self-sufficiency. An NZeconomy, which is flexible and adaptable.

by Neville C | 9th Jul 11, 5:46pm 1310190416

The article does talk about shortages and inflation, state intervention and chronic resource insufficiencies but that still doesn't negate the proposition that the demand wont be there. The earth may be incapable to meet the demand, but that just makes the resources that are available more valuable. As the relative cost of gaining those resources changes it may also change the economics of how things are done.

It follows that as NZ is resource surplus, it is like to benefit from these trend.

by Nicholas Arrand | 9th Jul 11, 4:46pm 1310186806

Nice SocGen article, NevilleC. I subscribe to their hypotheses, and particlulaly THIS GRAPH , highlighting where we may be at in the cycle. We appear to be at the final part of Winter, when 'concern, fear, panic and despair ~ fall in inflation leading to outright deflation' come in and the assets to have are gold, cash and bonds. Only when this period has passed will the next asset investment cycle start.

by Kunst | 9th Jul 11, 5:49pm 1310190540

Nicholas – again the SocGen document is short of many other, more important risks/ scenarios listed on the:

http://en.wikipedia.org/wiki/Risks_to_civilization,_humans_and_planet_Earth

by Neville C | 9th Jul 11, 6:12pm 1310191971

How is this list any different from the traditional 'four horses of the apocalypse' (Pestilence, War, Famine and Death) that have stalked mankind forever but mankind has survived with less knowledge and technology than we have now.

Are you saying that this time its different?

How in the present any different from the fall of Rome, the plague in the 14th century, WW1, WW2 and many more examples of more localised disasters?

by scarfie | 9th Jul 11, 8:12pm 1310199155

From what I understand what you are looking at is to see these things on a world wide scale, and all at the same time. It is also the impact of incurred as much as the occurance itself.

Most people don't realise that the point of the warning is that if man is left to manage the earth he will eventually ruin it. The ruin part is predicted amongst what you specify.

Wait until we get to a days wages for a loaf of bread, I think you can see that brewing.

by Kunst | 10th Jul 11, 12:51am 1310215867

Yes Neville, this time it is different. My thoughts and the link above tell of a far more complex, interacting mechanism of events, which troubles not only continents or a high number of countries, but the entire world.

To come back to my original comment about the PM. His statement is stupid and irresponsible. As I described many times the nation needs a new economic strategy – a long term plan, which even could be developed as a model for the rest of the world.

by Kunst | 10th Jul 11, 9:53am 1310248380

Opps – finally a culture change – Q&A a new format with experts from the real production sector talking tough – great program – well done TVone.

by LloydM1 | 9th Jul 11, 6:19pm 1310192362

For sure it doesn't factor in such variables as eugenics or other Malthusian practices which just may rear up. Depopulation , or population management is happening all over the world in various forms, yet is not often mentioned in charts of how best to use what finite resources are left on earth. No this is not what I am in to , in case anyone wants to make assumptions

http://naturalnews.com/032912_FDA_dietary_supplements.html

Let's see how this plays out then wait & see if it gets talked about in our part of the world

by scarfie | 9th Jul 11, 8:15pm 1310199354

Woah. Although the battle has been going on here for years.

But recently I have seen evidence that synthetic substitutes are ineffectual compared to the product in its natural state.

The minerals we are deficient inshould still be available, so growing organic is the way to go.

by LloydM1 | 9th Jul 11, 9:05pm 1310202356

Hey scafie , yes organic for sure. But with some strange things happening globally around food supply , seeds etc , I just hope Nz can protect it's primary productive advantage. Because like any other system , the desire to control food is very high. Include water in this also.

by LloydM1 | 9th Jul 11, 9:04pm 1310202287

Double update

by Nicholas Arrand | 9th Jul 11, 11:39am 1310168368

Nearly 0.8400, becasue as the atricle says, "A shock fall in the number of jobs being created in the US has reignited fears over America's economic recovery", Looks a bit grim out there.

by LloydM1 | 9th Jul 11, 11:57am 1310169432

A shock fall , what a load of garbage. Oh it's a shock because we though we were recovering, it's mind games of the lowest denominator. Here is a different view. The uSA is being collapsed deliberately, think about it very hard , and look into the history. IMO the smaller nations going bust are just a test bed to see if the big one can fall. Gotta entertain all options when there is no sense to it all. As the economy dies more wars have started with more to come , it's that simple. Nobody will escape the fallout if the USA goes toes up. Better hope they impeach Obama then get glass Steagall back in place , otherwise it will be just about over.

by LloydM1 | 9th Jul 11, 11:40am 1310168443

Jk and his banker mates are loving the kiwi dollar. What a sad little joke this is. Does he care for his country ? Does it look like he cares , this is just so awful to watch. Do something John ! Oh yeah wrong dream

by Wolly | 9th Jul 11, 12:43pm 1310172236

I wonder whether much of the buying is in anticipation of Bollard having to raise the rate...soon...fast...high...!

by Gloom | 9th Jul 11, 3:18pm 1310181481

Wolly, it is nothing to NZ$, it is weaker USD.

by LloydM1 | 9th Jul 11, 12:55pm 1310172954

Come on wolly , sounds like a conspiracy theory :) , it's all ok , nothing to see here.

by Grant A | 9th Jul 11, 3:36pm 1310182560

LloydM1 - interesting comments - is it just the usual hyperbole or can you actually cite examples/evidence that firstly he cares not, and secondly that he can do anything about it

Interested to read your response

by LloydM1 | 9th Jul 11, 4:08pm 1310184494

Grant , when I asses or analyze anything I use real life intuition, expeience , and where appropriate academic research & stats etc. I try to keep the academia out where possible because I find it asinine mostly when it comes to the human factor. I do speak with friends who are experts I their fields if I need to , however more than a decade of studying systems & over 30 years of life can let you see much if only you open your mind. Ok so to this example which is transparent. Ex banker comes from nowhere into political scene , & quickly becomes party leader under odd circumstances with Brash who then leaves the Nats to now lead their right wing branch. Nats then win election due to epic decade of failure by labour overall , and by strategically keeping schtum & telling some lies. Some non lies , tax cuts we can't afford and no asset sales in first term were true. So in comes the amazing new leader with zero skills to run a country or even a small business. He Then seeks to assure power with bribes to maoris , sets up a super city nobody asked for and steps on democracy in Christchurch with the council. Telling the world where our SAS are operating & now the SIS surveillance bill has been passed with disturbing new powers for civil servants added. All of the above were in his control. Meanwhile his govt are borrowing up huge while refusing to say where from or at what rate, all while giving pre OCR announcement announcements to his banking friends. Shall I go on ? All this adds up to me to someone who is not working in the interests of his country. If it smells bad it most likely is bad. His cabinet is failed old Nat stooges and a deposed leader now at the purse strings. The whole political arena of all colours is rotten to the core , and needs to be turned on it's head. How can this happen , well if people decide they can get out from the television and start to think and ask hard questions which the media refuse to do , the change WIll happen.

by LloydM1 | 9th Jul 11, 4:36pm 1310186197

Grant most of all the health of the economy is under JK control & what other than the ridiculous cycle lane idea has he regurgitated? While other countries debase their currencies & manipulate , what is JK doing ? Oh that's right , mouthing off about an export lead recovery, it's too serious to laugh ,i do not have time for hyperboles as you call them

by Grant A | 9th Jul 11, 4:59pm 1310187540

Ok Lloyd, thanks for the feedback, I'm more informed about what motivated you to make such comments. I don't think we'd gain any benefit from debating it as theres a world and a half between us in opinion on the subject - I have some knowldge of the individual. "Zero skills to run even a small business" said it all for me - the guy successfully ran a massive global business so there is just one of your statements that is completely untrue. I guess what youre saying is that our previous leaders being school teachers, lawyers, academics, were better suited

by LloydM1 | 9th Jul 11, 5:33pm 1310189639

Not at all Grant , he ran a foreign exchange team at merryl lynch bank, i also trade fx and have worked for major banks running global teams & projects. Does this give me the skills to run a business , let alone a country , absolutely not! Have you worked as an fx trader ? Have you worked on global banking projects with bankers for years of your lIfe ? If not you are not really qualified to comment and it makes it hard for you to understand.
Grant you have asked questions , I have substantiated my comments , you have given nothing but generalities. I'm interested to hear what it is you know that tells myslelf and others here , how JK is working for Nz & how he is able to do so. I would love him to be doing these things and be a fantastic pm for our country , I assure you of that.
So off you go, let's hear more of what you claim to know about the individual & his credentials Grant!

by LloydM1 | 9th Jul 11, 5:46pm 1310190380

Oh and Grant , never guess or assume you know what someone else is saying , unless they explicitly say it Just because I question the credentials of JK does not imply I think teachers , lawyers etc were or are better suited. Your naive comments are a blockage to your personal evolution & that of our country.
My only motivation is for Nz to be as great as it can be, so I will use tools , ask difficult questions & demand accountability & expect nothing less than the absolute best from any servants lucky enough to be in a position to positively impact our country. We must demand better always Grant or what we get is what we have had for decades up to including now!

by Grant A | 9th Jul 11, 5:48pm 1310190480

LOL... I think you've just indicated that I'm qualified to comment. Nice talking, have a great weekend

by Realtor in France | 9th Jul 11, 6:33pm 1310193220

Lloyd, I'm with you...... there is so much blinkered vision on this site and comments, it is about time clear the head of old and past dogma, see our situation for what it is and our place in the global seen, which is rather small. That said kiwis and new Zealand can punch above it's weight, but it would help to have a visionary leader......just a matter of finding one.

by Colin Riden | 9th Jul 11, 7:24pm 1310196298

Agreed.

but it would help to have a visionary leader......just a matter of finding one.

I think we are up against it on this one (our situation is little different to that in the US), but hope springs eternal:

http://www.oftwominds.com/blogjuly11/shape-of-things6-11.html

Thus anyone who promises that their share of the swag will remain untouched wins, and anyone who suggests the swag is unsustainable is rejected as "judgmental" or "negative." To the degree a nation gets the leadership it demands, then the U.S. is in trouble. We're now a nation of spoiled teens who get to elect their parents. No surprise, the 'rents who never enforce any rules, never challenge their own bosses (the kleptocrats) and who dole out the most allowance win every time.

Thus we get leaders who refuse to challenge the Financial Power Elites, cartels and fiefdoms because the Status Quo would devote all its stupendous wealth and influence to defeating a challenger, and we get leaders who refuse to be honest with the American people because that honesty is rejected as unwelcome.

Ideally, a leader persuades the public to grow up rather than pander to their basest desires, but such a leader would only have one term of office.

by scarfie | 9th Jul 11, 8:28pm 1310200113

Great to see someone that can accept reality.

Frustrating when you can see what is coming by attempts to prevent is are ineffectual.

All you can do is ensure you are prepared.

by LloydM1 | 9th Jul 11, 7:39pm 1310197143

Colin & Realter, visionary leader along with quality advisors, cabinet & Public reps who have not been part of the system to the extent that they have been bent past their use by. This of course relies on adult like voters who can see past themselves , because until this happens it is very hard to experience the life the all of us are entitled to if we contribute. It has to start at local , then regional level , at such time central will be forced to follow suit out of public demand & expectation. It's about accountability & the never ending search to improve how you serve your town , city or country, if you're privileged enough that people want you to do so. Time is not long now to make the change , I imagine that if Gen X don't then it's going to be over for Nz. Change will come, I know of some people who are going to give it a best shot to achieve what I refer to here. We should want to be proud of our country , not disappointed continually. That's not acceptable to me, so it's stand up or put up!

by Colin Riden | 9th Jul 11, 8:59pm 1310201975

Thanks Lloyd.

I think your response covers the situation well, but it might benefit from a more precise flow of logic. Give me some time to think on whether I can deliver that.

by Andrewj | 10th Jul 11, 9:25am 1310246721

Lloyd, you have my vote, where do I sign up?

http://www.telegraph.co.uk/finance/comment/liamhalligan/8627714/Liam-Ha…

This may be informed optimism. Or it may just be wishful thinking. Whatever the outcome, one thing is clear: Westerners who think our massive sovereign debts are someone else's problem are in for a rude awakening. Yes – the so-called emerging markets, led by China and the big oil exporters, are the biggest holders of our sovereign debt. I often hear "savvy" observers argue that such countries wouldn't dare stop lending to us because that would undermine the value of the Western debt they already hold.

This is a staggeringly complacent view. While the big emerging markets are fiscally sound, running relatively small annual deficits and with rather low debt stocks, the Western world – not only the US and the eurozone's "usual suspects", but the UK, too – is in great fiscal danger. The only reason we are still able to roll over our sovereign liabilities is because, for the most part, the true extent of the fiscal risks we face hasn't yet been priced in to yields on global markets. What's happening on the eurozone's periphery, even if the current crisis is averted, is just the beginning.

by LloydM1 | 10th Jul 11, 6:31pm 1310279508

Double update again

by LloydM1 | 10th Jul 11, 6:36pm 1310279767

Thanks Andrew , and yes you're welcome to sign up. The mechanisms are being put in place currently , which will become clearer as they get rolled out. It staggers me what people don't want to see , can't see , or don't even read about, yet pass comment on. Im sure you will agree that attempting to allow people to critically challenge their thoughts & core beliefs to allow holistic thinking is a monumental challenge, but one that with the sound plan & quality people , can & will happen. It's a long play , it has to be , however time is short to get it off the ground. I have said in other posts I believe that if my generation do not take responsibility, that it is likely to be too late. Who would not want to be involved in attempting to be the generation who laid the foundations in many of the facets of Nz life, which give hope to those generations to follow , as well as positive platforms , systems & environment to progress onwards.

by Colin Riden | 10th Jul 11, 6:49pm 1310280573

Good to see. I am also interested in what you are starting.

by LAJ | 10th Jul 11, 6:56pm 1310280980

Do the mechanics involve a new political party or some other type of organisation? What actions will be taken specifically to solve all these problems? ie if you were a political party what policies would you be advocating?

by LloydM1 | 10th Jul 11, 7:19pm 1310282399

Colin , it's a case of did I stay away from Nz forever or come back , to at least try something, so that's what's going to happen. Ive been off this site a while , and jumped back in recently to see , hear the vibe from a small section of Nz. When I have been home , my feeling is that people are waiting for something new that may give optimism , it's not an easy task but has been years in the planning.
LAJ. It has a name but I'm not going to label it. Labels breed preconceived ideas, as do political references. If people can start to think outside themselves for the countries benefit , whatever the subject or system being discussed then this has to be the ideal outcome. To get people thinking as as a cohesive positive force is the challenge, pretty big one too ,so it has to be interactive.

by Realtor in France | 10th Jul 11, 7:20pm 1310282418

'The big wheel turns slowly' it therefore requires the weight of numbers for it to gather momentum. Change, as we have all witnessed in Egypt and other middle eastern states, was sparked by the disenfranchised educated young that were prepared to stand up and be counted. New Zealand has since the chch quake, it seems, slipped into a state of depression? We have the fundamentals of a truly great country, but now require that 'positive spark' to get our wheel turning.......rather than just spinning in the same place.

by LAJ | 10th Jul 11, 7:46pm 1310283962

Its all a bit abstract for me sorry. Unfortunately one persons idea of what is good for the country is the opposite of another's so unless there are some concrete "policies" I don't know how you can rally support. I don't think anyone would disagree there is a big problem and we're heading for trouble though.

by LloydM1 | 10th Jul 11, 8:12pm 1310285572

LAJ , I'm hardly going to announce anything on his site eh, think about it. If everyone sat back & waited then what would happen. That's right , it continues to get much worse much faster. Some people have vision and the desire to have a crack. I imagine that all those people would ask is for are open minds. it's not about rallying support , it's about bringing people together who also care about Nz, casting off the blinkers having a strategy & starting local. It needs a fresh view bro , you know it does , you just don't know what it is !

by LloydM1 | 10th Jul 11, 7:46pm 1310284018

Realter , slowly it turns & needs some folk to initiate the spark for sure. I love Nz passionately & am willing to bet that once that spark is lit , it will spread. Kiwis are good people who need to remember the history of the countries great efforts to stand up and lead on what is right & good. First to give woman the vote , standing up for apartheid , nuclear free etc. All shining examples of Nz doing our part. Now it's time for Nz to look inside to help our country. People will have to look outside themselves , but the collective view will have to be what is best for Nz, not what we are told is best for us, but what the people decide to tell the so called leaders , what is best for us & hold them to account for representing what we want!

by LloydM1 | 10th Jul 11, 7:49pm 1310284199

Double

by Wolly | 11th Jul 11, 8:12am 1310328736

Gosh that's not a Tsunami heading our way is it...?

"If the ECB's Jean-Claude Trichet is right in claiming that Europe was on the brink of a 1930s financial cataclysm a year ago - and I think he is - it is hard see how the threat is any less serious right now.

Fall-out from Greece flattened Portugal and Ireland last week. It is engulfing Spain and Italy, countries with €6.3 trillion of public and private debt between them.

Yields on Italian 10-year bonds hit a post-EMU high of 5.3pc on Friday. This is not just a theoretical price: the Italian treasury has to roll over €69bn (£61bn) in August and September; it must tap the markets for €500bn before the end of 2013. The interest burden on Italy's €1.84 trillion stock of public debt is about to rise very fast.

Spanish yields punched even higher, through the danger line of 5.7pc. The bond markets of both countries are replicating the pattern seen in Greece, Portugal, and Ireland before each spiraled into insolvency. And the virus is moving up the European map. French banks alone have $472bn (£394bn) of exposure to Italy and $175bn to Spain, according to the Bank for International Settlements.

"We believe the European sovereign crisis might be entering a new phase with contagion reaching the larger economies," said Jacques Cailloux, chief Europe economist at RBS"

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8628939/Italy-and-Spain-must-pray-for-a-miracle.html

and down here at the bottom in the silly isles our fools in charge have to refi billions and billions in a market where the cost of the money is heading in only one direction.....bugger!