View Full Version : New Zealand Dollar Versus USA Dollar
17-10-2009, 05:02 PM
Okay, Im not a currency trader, but a firend of the family is about to embark of an overseas trip next year, and is wondering should she buy some USA dollars now, or wait.
I see Key said it should hit 80 cents, that seems a tad high.
What would you guys do, but now or take the risk and buy early next year?.
18-10-2009, 11:29 AM
The US$ index is still falling. I don't think that there any rush to buy $US right now.
People talk about the "strong" NZ$, and what should be done about it. The crux of the matter is the weak US$, and no one in NZ can do anything about that. John Key may yet be right about NZ.80 exchange rate.
Longer term is always more difficult to judge, but shorter/Medium term it looks like the Kiwi may ease back. No position a yet, but I will be checking for reversal patterns in the grey box zones.
Like the Blog Arco. I think that the Kiwi will stay round the 70 to 80c mark for the next 6 months. Kiwi and Aussie are two of the best performing western economies which will provide support. I Hope that the reserve bank however keeps our interest rates low and does not follow the RBA.
19-10-2009, 11:51 AM
Thanks for all the advice.
19-10-2009, 12:24 PM
Theres a strong more to move Oil to another currency with many other commoditys following suit (gold). When this happens the $US will be worth the paper its written on - another words next to nothing. $1AUS will be worth $1 US by years end with the $1NZ following suit by this time next year.
21-10-2009, 11:22 AM
Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading.
This will soon led to the other comodities following suit and this will ultimately led to a further demise of the US dollar. Here is a recent article
"By Robert Fisk
Tuesday, 6 October 2009
Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years."
The decline of the US dollar is so far on rumour. Just imangine what impact this will have when this becomes a fact.
Also there is a direct correlation between the $US and the price of Oil, which has seen an increase in the POO. Peak Oilers would have you belive that its a supply and demand issue but this has no founding.
I mentioned this on the General Chit Chat thread 7/10. However I saw somewhere else where this was doubted as true.
I'll try to find that article.
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
I read somewhere that "quote"...........Robert Fisk is known USA hater, lefty as far you can see......
Heres one of the articles.
Is the Sky Really Falling?
By MIKE WHITNEY
Robert Fisk lit the fuse with his hyperventilating narrative which appears in Tuesday's UK Independent which went viral overnight spreading to every musty corner of the Internet and sending gold skyrocketing to $1,026 per oz. Now every doomsday website in cyber-world has headlined Fisk's "shocker" and the blogs are clogged with the frenzied commentary of bunker-dwelling survivalists and goldbugs who're certain that the world as we know it is about to end.
From Fisk's article:
"In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
“Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
“The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. ‘Bilateral quarrels and clashes are unavoidable,’ he told the Asia and Africa Review. ‘We cannot lower vigilance against hostility in the Middle East over energy interests and security.’”
"International cabal"? C'mon, Fisk, you're better than that.
Reports of the dollar's demise are greatly exaggerated. The dollar may fall, but it won't crash. And, in the short-term, it's bound to strengthen as the equities market reenters the earth's gravitational field after a 6 month-long ride through outer-space. The relationship between falling stocks and a stronger buck is well established and, when the market corrects, the dollar will bounce back once again. Bet on it. So why all this bilge about Middle Eastern men huddled in "secret meetings" stroking their beards while plotting against the empire?
Isn't that the gist of Fisk's article?
Yes, the dollar will fall, (eventually) but not for the reasons that most people think. It's true that the surge in deficit spending has foreign dollar-holders worried. But they're more concerned about the Fed's quantitative easing (QE) program which adds to the money supply by purchasing mortgage-backed securities and US Treasuries. Bernanke is simply printing money and pouring it into the financial system to keep rigor mortis from setting in. Naturally, the Fed has had to quantify exactly how much money it intends to "create from thin air" to placate its creditors. And, it has. (The program is scheduled to end by the beginning of 2010) That said, China and Japan are still buying US Treasuries, which indicates they have not yet "jumped ship".
The real reason the dollar will lose its role as the world's reserve currency is because US markets, which until recently provided up to 25 percent of global demand, are in sharp decline. Export-dependent nations--like Japan, China, Germany, South Korea--already see the handwriting on the wall. US consumers are buried under a mountain of debt, which means that their spending-spree won't resume anytime soon. On top of that, unemployment is soaring, personal wealth is falling, savings are rising, and Washington's anti-labor bias assures that wages will continue to stagnate for the foreseeable future. Thus, the American middle class will no longer be the driving force behind global consumption/demand that it was before the crisis. Once consumers are less able to buy new Toyota Prius's or load up on the latest China-made widgets at Walmart, there will be less incentive for foreign governments and central banks to stockpile greenbacks or trade exclusively in dollars.
Here's a clip from the Globe and Mail cited on Washington's Blog:
"A UBS Investment Research report says that while it would be wrong to write off the U.S. dollar as the global reserve currency, its roughly 90-year iron grip on that position is loosening. ‘The use of the U.S. dollar as an international reserve currency is in decline,’ said UBS economist Paul Donovan.
“’The market share of the dollar in international transactions is likely to decline over the coming months and years, but only persistent policy error – or considerable fiscal strain – is likely to cause the dollar to lose reserve currency status entirely.’
"The UBS report maintains that the gradual slide of the U.S. dollar is being driven not by the world’s central banks, but by the private sector, as individual companies increasingly abandon the greenback as their international currency of choice.
“’The private sector’s use of reserves is more important than official, central bank reserves – anything up to 20 times the significance, depending on interpretation,’” Mr. Donovan said. “There is evidence that the move away from the dollar as a private-sector reserve currency has been accelerating since 2000.’”
As private industry veers away from the dollar, governments, investors and central banks will follow. The soft tyranny of dollar dominance will erode and parity between currencies and governments will grow. This will be create better opportunities for consensus on issues of mutual interest. One nation will no longer be able to dictate international policy.
So-called "dollar hegemony" has added greatly to the gross imbalance of power in the world today. It has put global decision-making in the hands of a handful of Washington warlords whose narrow vision never extends beyond the material interests of themselves and their constituents. As the dollar weakens and consumer demand declines, the United States will be forced to curtail its wars and adjust its behavior to conform to international standards. Either that, or be banished into the political wilderness.
So, what exactly is the downside?
Superpower status rests on the flimsy foundation of the dollar, and the dollar is beginning to crack. Fisk is right to this extent; big changes are on the way. Only not just yet.
21-10-2009, 02:43 PM
I didnt realise that Fisk was a US hater. I just thought he was an alternative thinker. I guess that its easier to label someone then lisen to the message. Looks like he was right about the price of gold LOL.
But actually if you get rid of the World Order Bull**t and goggle $US currency of price of oil, this is becoming more then just a rumour. In fact, its been closely related to $US decline over the last couple of weeks.
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