Nzd.usd

[srotherh]

Interesting article here by Brian Gaynor on the most speculative currency in the world - the NZD.

Discusses the adverse effects on NZ exporters but doesn't offer any solutions.

http://www.nzherald.co.nz/business/n...0582422&pnum=0

macduffy

A great article
Scary thing is we can be played up and down by Hedge funds with little control by government. See lots more volatity to come. Not good for us as a country.

"More than 90 per cent of NZ dollar trades are against the US dollar yet the Reserve Bank estimates that only 59 per cent of New Zealand's overseas trade is transacted in this currency.

These figures clearly indicate that the NZ dollar has great liquidity, is widely traded, overseas investors dominate trading activity and only a tiny percentage of the transactions are trade related. In other words the Kiwi is one of the world's most speculative currencies and is the Las Vegas or Reno of the currency world.

The NZ dollar is a highly traded and speculative currency because it is totally deregulated, it is volatile, our economy is perceived to be commodity based, the NZ Government and Reserve Bank are too small to undertake effective intervention and there isn't a large enough pool of local private capital to influence the market.

This makes the NZ dollar extremely difficult to forecast because it is primarily driven by speculation - rather than fundamentals - and many of these speculators are relatively uninformed about New Zealand."