Opinion: What needs to happen for a NZD recovery

By Roger J Kerr There are several prerequisites to occur before anyone can have any confidence that New Zealand interest rates have bottomed and the NZD/USD rate has bottomed out of their respective down-cycles:- - International USD commodity export prices for dairy and beef stabilising and not falling any further. A return of economic stability in Asia is needed before this can occur. - The downturn in the NZ housing market finding a bottom as significantly lower mortgage interest rates and increased net migration inflows restore some confidence. - Improvement in the monthly export figures in the first half of 2009 to prove that New Zealand can stage an export-led recovery back to positive GDP growth. - Consumer and business confidence indices stabilising at the lower level and showing signs of recovery. Whether these conditions are fulfilled in mid 2009 or late 2009 will determine the timing of a NZD recovery back to 0.6000 against the USD.    --------------- *Roger J Kerr runs Asia Pacific Risk Management. He specialises in fixed interest securities and is a commentator on economics and markets. More commentary and useful information on fixed interest investing can be found at rogeradvice.com