Nzd usd

[beacon]

NZ economy ‘on track’ for a soft landing, says Infometrics economist Gareth Kiernan
https://www.nzherald.co.nz/business/...H3EMFTK2KWIDM/

“Soft landing” is when a cyclical slowdown in economic growth avoids recession, usually by controlling inflation - without causing a severe downturn in the economy...
It is the goal of a central bank when it seeks to raise interest rates just enough to stop an economy from overheating and experiencing high inflation, without causing a severe downturn

[beacon]

US Wage Inflation tempering despite continuing job growth
US CPI down to 2.31% (truflation as of 27/10/23) versus Government reported 3.7%

[beacon]

US Fed Nov hike looks unlikely

From https://www.cnbc.com/2023/10/27/fede...s-for-you.html

US Fed has already raised interest rates 11 times since last year — the fastest pace of tightening since the early 1980s

US average credit card rate is now 20%+ — an all-time high. Further, with most people feeling strained by higher prices, balances are higher and more cardholders are carrying debt from month to month.

US average rate for a 30-year, fixed-rate mortgage is up to 8%, the highest in 23 years, according to Bankrate. Also, anyone shopping for a new home has lost considerable purchasing power.

US average rate on a 5-year new car loan is now 7.62%, the highest in 16 years, according to Bankrate.

[beacon]

US Wage Inflation tempering despite continuing job growth

Data released recently has given further credence to the narrative that inflation is easing and the labour market is slowing (the cost of labour declined in the third quarter and October job additions have come in below expectations), boosting the scenario that the Fed is done with rate hikes.
https://www.goodreturns.co.nz/article/976522447/are-equity-markets-due-for-a-strong-finish-this-year.html

[beacon]

Are you guys trading this pair or thinking longer-term / hedging?

At these price points, it's great value to either.

[FTG]

A little humility may be in order?

Lest not forget...


"Markets" are NOT Rational; and often don't behave rationally; from our subjective perspective.

"Markets" are primarily driven by emotion. The participants' emotive responses to perceived reality - NOT necessarily actuality.

This goes for ALL Market "Participants", whether it be retail investors, insto's, Govt authorities and yes, also Algo's!

"Markets" do NOT care about election outcomes and even when they do appear to take notice, it will only be for fleeting periods.

"Markets" do NOT care if you, me, or the next person, is right or wrong.

You can do all the economic, geopolitical etc analysis that you want, but just remember markets still do NOT care for your opinion; even if your fundamental hypothesis is "bang on".

"The Market" has exclusive rights to determining what price will be printed on the Ticker.

LISTEN to the Market, do NOT argue or fight against the market. If, on the other hand, you continue to think & insist that you are right, the more likely that you will fall into the "dark hole of pain"!

[beacon]

LISTEN to the Market, do NOT argue or fight against the market. If, on the other hand, you continue to think & insist that you are right, the further you will fall into the "dark hole of pain"!

Well reminded FTG, thanks. I'll trim my order sizes down so I can continue to buy NZD as it falls into the "dark hole of pain", and sell other stuff I hold, so I can increase my firepower and strengthen my balance sheet.

I have no fight with the market. It is a place where I will prosper eventually, if I have the reserve and can hold my positions. Disclosure: I bought more NZD last night.

NZD may or may not go lower to 55/56c. If market reaches down to flirt with it briefly, no permanent damage is caused. If it stays down there or drops further, just pause and contemplate what damage and "pain" it causes to NZ (a net importer!), and what it will do to NZ property owners with mortgages (our biggest industry now - by contribution to GDP, and for most Kiwis their primary investment).

So, I agree. Let's be humble. Let's be careful what we wish for...

[winner69]

Our trade balance is horrendous ......miles away from historical levels

That must be a drag on nzd?

[beacon]

Our trade balance is horrendous ......miles away from historical levels

That must be a drag on nzd?

Yes Winner. That is a worry, hence my earlier comment about what we in NZ (including Government, Corporate, Citizen) should be doing (including spending/buying/importing responsibly commensurate with our earning/exports etc.), but there are good things about it too. According to Trading Economics, New Zealand’s trade deficit shrank to $2.291 billion in August 2023 from $2.634 billion in the same month of the prior year.


According to ANZ Research, New Zealand’s trade balance is currently only -3.5% of GDP (Negative Trade Balance means we are importing more than we are exporting). https://www.anz.co.nz/content/dam/an...e-20231019.pdf

That's not too far from US's trade balance as a percentage of GDP (it was -3.7% in 2021, I suspect it has increased since then).

[beacon]

That's not too far from US's trade balance as a percentage of GDP (it was -3.7% in 2021, I suspect it has increased since then).

2023 1019 NZ trade balance as % of GDP similar to US.JPG

Here is a visual representation from the World Bank, showing NZ and US similarity. https://data.worldbank.org/indicator...ns=US&view=map