Here's my summary of the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that Auckland furniture manufacturer and exporter Criterion Furniture has been put into receivership.
About 70% of Criterion's home and office furniture is exported from its factory at East Tamaki in Auckland, Criterion's website says, which includes the announcement that KordaMentha put the firm into receivership on Tuesday.
Radio NZ reported Criterion owed banks NZ$11 million and had been up for sale for several months, but there had been a serious decline in trading in recent months.
The New Zealand dollar was elevated around 5 month highs of 83.5 USc in morning trading. It is near record highs of 63.5 euro cents and 52.7 British pence. See BNZ's currencies report here on our site.
Meanwhile, Chinese Premier Wen Jiabao reassured German Chancellor Angela Merkel that China wanted to help Europe solve its sovereign debt crisis and would look to invest in its rescue funds. See more here at BBC.
Also, US Federal Reserve Chairman Ben Bernanke testified before Congress overnight, saying there were some encouraging signs of economic growth emerging in America, but the world's largest economy remains vulnerable to shocks. See more here at Bloomberg.
However, Federal Reserve Chicago President Charles Evans called for a third round of Quantitative Easing (QE) or money printing to fire up the US economy. He suggests more than US$1 trillion more of QE should be added to the US$2.3 trillion already printed. See more here at Bloomberg.
Meanwhile, the European Central Bank is set to lend a further €1 trillion to European banks on February 29 for three years at 1%, much of which will then be invested in higher yielding bonds elsewhere, including New Zealand and Australia, in 'carry trades' that boost the currencies of economies that choose not to cut their interest rates and print money and devalue the currencies of the printers.
Europe, the United States, China and Britain have all suppressed interest rates and printed money in the last four years in an attempt to fire up their economies and dig themselves out from under huge debt mountains. However, it raises the risk of 'currency wars' where countries are forced to erect capital controls, intervene in currency markets and print their own currencies in a 'beggar thy neighbour' race to the bottom.
New Zealand's Official Cash Rate is on hold at 2.5% and the Reserve Bank has down-played talk of any currency intervention to stop exporters such as Criterion being driven out of business by a high currency caused by carry trading beggar-thy-neighbour policies.
Prime Minister John Key and Finance Minister Bill English have taken a hands off approach to the currency and expressed support for New Zealand's inflation-targeting regime and a free-trading currency. See more here from English on how monetary policy doesn't matter any more and why exporters should get used to a currency over 80 USc.
See John Key here saying a high New Zealand dollar is not all bad.
(Updated with more detail, links)
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