Nzd.usd

[bogus1]

short closed, bounced of weekly trend line 7980 , bollard indicated tightening cycle finished which has taken wind out of sails of bulls , pretty nervy trading though, will allow to settle.
have total laptop fever, must get off this planet quickly, see you next week

[Hoags]

I agree kind of wish I didn't enter now, I have things to do today!

[arco]

By NZPA
Thursday 26th July 2007

Reserve Bank Governor Alan Bollard said: "The New Zealand economy is running strong. We are recording continued big increases in international commodity prices, especially dairy, reflecting solid world demand for our products.

"This is very good news for New Zealand. Given this positive situation, some of the negative commentary circulating about the economy is unwarranted.

"However, the continued tight labour market, high capacity use, and rising oil and food prices all point to sustained inflationary pressures. That is why we are increasing the OCR today.

"The New Zealand dollar has reached very high levels recently, driven by US dollar weakness and New Zealanders' heavy demand for borrowing. This level of the currency has been hurting exports.

"The high New Zealand dollar is not sustainable medium term and investors should understand this. The higher OCR now gives strong incentives to New Zealanders to save.

"New Zealanders have been showing early signs of moderating their borrowing.

Provided they keep this up, and the pressure on resources continues to ease, we think the four successive OCR increases we have delivered will be sufficient to contain inflation."

[arco]

NBR Comment

OCR lift betrays low opinion of NZ potential

by Neville Bennett

The Reserve Bank’s justification for raising the OCR to 8.25 per cent is much briefer than usual .

It says hardly anything about household demand (Kiwi’s are showing “early signs of moderating their borrowing”) and absolutely nothing explicitly about housing.

This is strange as on June 7 it emphasised demand, “particularly in the household sector” and “buoyant housing” market activity.

On 26 April, the Bank said demand was fuelled by a“buoyant “ (they like the word) housing market, increases in government expenditure, rising terms of trade, ongoing net immigration, and a robust labour market.

Most of the previous reasons for raising interest rates are not emphasised in today’s statement:

Housing is overlooked.

Government expenditure is overlooked (perhaps a case of ‘be nice to Cullen or he might over-rule me’ ?).

And migration and terms of trade are overlooked.

These omission are unexpected.

Although the housing market is steady, fiscal policy is inflationary, the Bank has suggested that migration be constrained, and the current account deficit is enormous.

So what is the Bank’s rationale?

The stress is on the good news of rising commodity export prices, especially dairy. Nevertheless, there are inflationary pressures indicated by the tight labour market, high capacity use, rising oil and food prices.

Are these valid points?

It is clear that demand is strong but in the tradable sector, inflation is in the middle of the 1 per cent to 3 per cent range.

As interest rates have been raised three times this year before today, there was a case for adopting a wait-and- see posture.

Australia is under similar pressures, but their Bank is proud of its 17-year boom, and is cheered that “property markets are firming” and borrowing is robust.

Australia’s growth rate is double New Zealand’s, but its OCR-equivalent is much lower (6.25 per cent).

The Reserve Bank NZ seems to have a low view of the economy’s potential output. It is putting the brakes on when growth is about 1.7 per cent.

The evidence is that,other things being equal, that New Zealand can have sustainable growth at over 3 per cebt per annum.

This rise in interest rates will hurt most businesses by increasing the cost of working capital and investment.

Many will be hurt further by the effects of the high dollar which will either reduce their export market or reduce the price of competing imports.

The manufacturers are hurting. They employ some 235,000 people and contribute to about 15 per cent of exports. They are bleeding jobs overseas.

The sectors suffering from the high Kiwi dollar get scant comfort from the Bank. It says the high dollar is caused by US dollar weakness and New Zealanders “heavy demand for borrowing”.

So it is back to householders after all.

Not the foreign-owned banks, not the RBNZ offering the highest interest rates in the world for the delectation of Japanese housewives.

It is worth emphasising again that the Reserve Bank takes a narrow view of New Zealand’s interests.

The consequences of its actions are damaging.

An unsustainable exchange rate hollows out manufactures, discourages many exporters, and creates huge balance of payment issue.

High short-term rates create an inverted yield curve which tilts the economy to recession. Creating a recession is absurd when the world economy is growing a record pace.

High interest rates also hurt business; curb investment and growth, and the building of wealth.

http://www.nbr.co.nz/home/column_art...me=NBR+Comment

[Steve]

quote:Originally posted by Steve

Short NZD @ 8053; stop 8130

Let's see how it plays...

Stop lowered to 8020, watching it decline...

[bogus1]

WOW !!!

[roddy]

Hi Steve
short at .7992 so not in as early as you however things moving nicely at the moment!

[bogus1]

things that make you go DOAH , possible 300 pippa and i got 60
d................o..............a............h.... ............

[bogus1]

by the way well done steve et al other shorters

[FTG]

For those interested in a little Elliott Wave.

Last 3 days action. Kiwi peaked at .8109. First move down to .7995 = 114 pips. Then corrected back up to 0.8081. Take the 114 pips and multiply by a Fibonacci 2.618 (= 298 pips)
Finally take these 298 pips and project down off the 0.8081 correction point. This projects a target of 0.7283.
Guess where we bottomed and turned back this morning! You got it, 0.7283.

Art in motion - question is, was this a A-B-C move or the first 3 waves of an impulse. Time will tell.