sharetrader
Page 111 of 111 FirstFirst ... 1161101107108109110111
Results 1,651 to 1,658 of 1658

Thread: Nzd.usd

  1. #1651
    Member
    Join Date
    Nov 2018
    Location
    Christchurch
    Posts
    304

    Default

    Agree there's a lot more lower to go. My problem is the NZD will stay low for several years or decades. Despite the ups and down of the NZ currency in the past 20 years, the only relavant factor we should be considering is "has the standard of living in NZ improved?" My friend that works in liason with the NZ Gov't on foreign matters / internal affairs stats etc. insists people's standard of living in NZ has gone worse and worse each decade and that previous generations lived a better life. That is with this trend, next generation will not live as good as their parents and that's a real sad thing when places like the US have seen a 7 for 1 increase in standard of living in the past 80 years or so.

    We have a globalist leader in the Labour Gov't party. She aligned her views to the Marxist views of the EU nations like Sweden and in process, introduced more regulations and taxes which pushes out development in the country. Even worse, scaring capital away from NZ (how else why is the NZD becoming weaker?). If we go to negative interest rates, watch out! Because the NZ business confidence index is at the pre GFC levels of 2008.

  2. #1652
    Update Ready To Install
    Join Date
    Aug 2010
    Location
    Floating Anchor Shoals
    Posts
    8,447

    Default

    I confess I dont know much about playing the currencies but we have exposure to $US ,$A and kiwi. Keep hearing $US is a good place to park $but the Fed is going to drop rates (and we are too ?) so maybe having a spread of currencies is a little protection in the volatility ahead but overall close to neutral.

  3. #1653
    Member
    Join Date
    Nov 2018
    Location
    Christchurch
    Posts
    304

    Default

    Quote Originally Posted by Joshuatree View Post
    I confess I dont know much about playing the currencies but we have exposure to $US ,$A and kiwi. Keep hearing $US is a good place to park $but the Fed is going to drop rates (and we are too ?) so maybe having a spread of currencies is a little protection in the volatility ahead but overall close to neutral.
    Unfortunately it doesn't quite work that way. In times of uncertainty the reason why currencies flee to USD is due to stability (as the US is the largest economy in the world, it makes sense to keep the assets in USD). When you price assets like crude oil, gold, silver, etc. they're all denominated in USD. So to the person that wants to avoid currency risk exposure to say buying gold, they need the USD. Both Canada and NZ hold NO gold reserves, that is the central bank holds no physical gold whatsoever and is not in the market to buying and selling like we see other countries do (ie Russia and China buying gold)... and because NZ holds no gold reserve, the NZD currency is 100% reliant on it's fiat value.

    This COVID19 is a killer for the NZ economy. If China stops buying our natural resources, our diary and meats, and more recently with immediate effects, no Chinese tourists and students coming to NZ; then i'm afraid the NZ '1 trick card country' is going to be exposed to a lot of downturn in the economy. The simple thing is just follow what Jacinda Ardern is doing. How can you continue to increase funding to beneficiaries, teachers, doctors and nurses, IRD workers, etc.. when the IRD tax take is diminishing? The simple answer is 'We will BORROW the FUNDS!' because when the NZ Reserve Bank lowers interest, you're going to see a double end sword. On the gov't borrowing front, foreign lenders would expect a higher interest payment due to NZ's increase risk (state of the economy), and on the domestic front, NZ capital will move abroad (mostly to the US) to seek safer return on investment.

    On my ticker i'm seeing NZD/USD at 0.6226

  4. #1654
    Update Ready To Install
    Join Date
    Aug 2010
    Location
    Floating Anchor Shoals
    Posts
    8,447

    Default

    Great, many thanks SBQ, that's increasing my simplistic view and reassuring in this fast evolving situation and a dilemma for our economy!
    Any other thoughts appreciated too. How about some Yen for example?

  5. #1655
    Member
    Join Date
    Nov 2018
    Location
    Christchurch
    Posts
    304

    Default

    Quote Originally Posted by Joshuatree View Post
    Great, many thanks SBQ, that's increasing my simplistic view and reassuring in this fast evolving situation and a dilemma for our economy!
    Any other thoughts appreciated too. How about some Yen for example?
    Japanese Yen? Again not a chance as Japan ranks #1 in highest debt to GDP of some +200%. If people complain about the US debt being so big with a debt to GDP ratio of around 100%, it is truly incomparable to Japan's level of debt. They have a real systematic problem because their debt is so high, many many future generations in Japan are forced to work longer hours. Well just look at how they live ; one would say they have a very high standard of living... but the people there are working like robots. Children doing 6 days a week for school, people working 60+ hrs a week as the normal to get into owning a house.. etc. Because of this inherit 'culture', lenders view Japan as being sustainable for the country to hold such high debt. Oh and Japan's 10 year gov't bond is like 0.3% vs the US 10Y bond over 1%. This mis-pricing could be the market has got it wrong in Japan ie we have 2 separate markets (investors for Japan and investors for the rest of the world). Kinda like what's going on in NZ with the way NZ's taxation has been structured to deter foreign investment while trying to persuade NZ capital to stay in NZ investments.

  6. #1656
    Member
    Join Date
    Nov 2018
    Location
    Christchurch
    Posts
    304

    Default

    What did I say? The NZ Kiwi under $0.60 USD to $1NZD today. I don't think people realise the impact of COVID19 has to the NZ economy. We're talking mass layoffs.

    https://finance.yahoo.com/news/freef...044814503.html

  7. #1657
    Guru
    Join Date
    Apr 2003
    Location
    Wellington, New Zealand
    Posts
    3,672

    Default

    Surprised no one talking about this one today. NZD to USD is now at .5490. Seems there is a run on NZ govt bonds.....

  8. #1658
    Member
    Join Date
    Nov 2018
    Location
    Christchurch
    Posts
    304

    Default

    Quote Originally Posted by blackcap View Post
    Surprised no one talking about this one today. NZD to USD is now at .5490. Seems there is a run on NZ govt bonds.....
    That's because most NZ investors don't understand the economics of how gov't fiscal & monetary policies impact the NZ currency exchange rate. Unlike the USA, NZ is not in a position that it can just simply print money out of thin air. The announcements of splashing out billions to save NZ businesses comes at a cost. When the NZ Reserve Bank rate is near 0%, it doesn't matter what they do because internationally, they're not going to lend ; there are none because they've already fled to the USD. No one is standing in line when NZ bonds go up for offer. The next step will be negative interest rates where the public's cash deposits will go to service the gov't, similar to a tax grab (theft from the people who have cash). To those owning real estate will be hit in this process as jobs are lost and housing prices will collapse.

    The USD is the world currency. When a person puts up their $ either to lend out or invest in US equities, they are basically saying they're betting on the American economy to recover and do better than any other country. That same person also could of lend the $ to NZ in NZ currency but that's like comparing the reliability of a car between a Toyota and a Volvo. The financial markets think the same, when huge capital outflows occur, our NZD gets weaker. When the NZ gov't goes on a printing / borrowing scheme.. again it will weaken the NZD because someone has to pay for it at then. Either in inflation or the slow erosion of standard of living. Now i'm not speaking of a mass exodus of people living NZ - we've seen this kind of thing before from wars and developing nations that have no fiscal or monetary controls. But to say that NZ is still the 'land of the milk & honey' is not even close to reality.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •