The Opening Bell: Where currencies start for Thursday, November 15, 2012

By Dan Bell

The NZD/USD opens sharply lower at 0.8105 this morning.

Very disappointing Q3 retail sales figures, released yesterday, started the rot for the NZD – domestic interest rates will be remain at low levels for some time to come.

NZDUSD selling gather momentum overnight after:

-   US retail sales for October missed expectations by a significant margin (+0.2% versus 1.1% expected); US equity markets dropped, & USD$ rose in response.

-   Israel killed a Hamas military leader inflaming middle east tensions and caused gold & oil prices to rally.

-   Euro-zone factory output in September fell by the most in 4 years, and a wave of anti-austerity strikes spread across southern Europe were reminders that the EU debt-crisis is far from being resolved.

In addition, Finance Minister Bill English mentioned he still saw “grumpy” economic growth, with a slowing apparent at the moment.

Global equity markets were all lower on the day.  The Dow fell 0.9%, while UK/European markets dropped between 0.8% & 1.1%.

Gold prices rose to USD$1727, while Copper edged lower to USD$7640 a tonne – it has dropped 9% since 19th September. Other metals prices were mixed.

The NZD opens at 0.8105 USD, 0.7815 AUD, 0.6360 EUR, 0.5115 GBP, & 64.95 JPY.

Business NZ Manufacturing Index will be released at 10:30am today.

Tonight bring EU GDP and Inflation figures, US inflation and manufacturing data as well as some Fed-speak.


To subscribe to our daily Currency Rate Sheet email, enter your email address here.



Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here

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?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a 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.


We should look at poor retail sales as a sign that people are reigning in spending and showing some commitment to delevaging debt. People are being more cautious with their spending habbits. A good result for New Zealand is naff Christmas sales which might sound disappointing to the retail sector but is actually what is needed at this present time.  Manufacturing Directors and CEO of companies in NZ that are not doing well need to take a 30%-50% hair cut in their salaries to make their businesses more competitive rather than axe the people that do the manufacturing.  They need to do Greek style austerity to the top paid salaries. 

Grumpy growth, eh?
Always beware comments which slide in the direction of emotives. Bit like surveys of optimism - totally irrelevant if the reality is at odds with those cumulative desires.
Meant to say the other day, Dan should also refrain from commenting on energy matters, if he doesn't know about energy. Touting the IEA 'report', without an appraisal of track record/history, and without a working knowledge of EROEI, is close to selective reporting - spin, in other words.
For the record, the IEA 'reported' future supplies, by tracking demand, projecting the graph, and using that to 'report' future supply. After much hassling from the Peak-Oilers, they did a survey in '08 - first ever. Well hello, Peak Oil was in '06, says Birol. (I'd have said late '05, but won't quibble, merely note he was later than us). They produced a graph - optimistic, of course - with a red wedge labelled 'yet to be discovered oil'. This year, they've even dropped the graph. Back to projections based on any uptick going, ignoring EROEI, same old spin/euphoria.
Interesting that Mike Moore and Dan both seem to need to address the (energy)  issue, though. I thought the economic model just found an alternative at a certain price, that that process went on forever, and that it supported endless exponential growth. Do we sense a little unease, boyos?