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  1. #1
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    Question GBP NZD Long Term

    Does anyone have a view of the long term direction of the GBP/NZD?

    I've recently moved back from the UK and decided to leave my money there in May hoping to get a better exchange rate. Since then I'm down about 60k NZD and really beginning to wonder

    While the NZD is strong against the USD and GBP is relatively weak historically. The GBP doesn't seem to be strengthening much. So is the NZD likely to weaken any time soon? (rather than the USD strengthen)

  2. #2
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    Default gbp nzd long term

    i have recently dredged up some old gbp to build a house. my timing could not have been worse. suffice it to say, my money is still in gbp.
    at about mid october, our dollar was the highest it has ever been on the gbp since it floated. this is an extreme end of the spectrum of gbp/nzd rates. if you look at a daily chart and go back as far as you can you will see this. a quick easy way of doing this is to go to this link, you will see it at a glance. http://www.nationalbank.co.nz/econom...ge/nzdgbp.aspx
    my effort was in mid october.
    what i am looking for is a reversion to the mean(about 36p) with a bit of overshoot so i can get a car as well(maybe 32p ish). remember earlier in the year we were at those sort of levels.
    i believe that this is on the cards during 2010 if the expected w shaped recovery pans out. we have yet to do the second leg of this recovery. there will be a 'flight to safety' which should(hopefully) over ride our higher interest rates. flight to safety means people buy big currencies like japenese yen, usd, gbp etc.
    hopefully we have seen trend change with a series of higher highs/higher lows since mid october. this seems to coincide with uncertainty in the continuation of this leg og the recovery.
    as i type, (2:25, 30 nov 2009) gbp/nzd is dropping like a stone, i hope i am right.
    any one who knows more about this than i do, please feel free to refute.
    i do think that mean reversion and flight to safety are two powerful arguments for a decline in our dollar vs gbp.
    if all is well in the world and interest rates prevail, i get 1/2 a house and no car.

  3. #3
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    Hope so , most my income is in pounds , have just been letting them accumulate and am living off my NZ money.

    Loathe to exchange for NZ at anything over 40c

  4. #4
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    They say that the UK economy will be one of the last to recover, so any significant FX movement may still be a while away before it kicks in...
    Death will be reality, Life is just an illusion.

  5. #5
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    Yeah, as someone with 5 years savings in GBP, I'm watching the NZD/GBP cross closely.

    Hard to imagine anything that is going to drive up sterling in the short term, but the market is full of surprises. Labour's out next year, so that's got to be a good start.

  6. #6
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    From "Top Ten investment tips for 2010 from Goldman Sachs"...

    "Long Sterling (against the Kiwi dollar of all things): Actually, that
    is a great idea – the pound and the kiwi are massively misaligned by
    historical measures. GS says New Zealand’s central bank will raise rates
    more slowly than markets think. The Bank of England will tighten more,
    by 300 basis points by late 2011."

    http://tinyurl.com/ygc3y5m

  7. #7
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    Quote Originally Posted by ruethewhirl View Post
    From "Top Ten investment tips for 2010 from Goldman Sachs"...

    "Long Sterling (against the Kiwi dollar of all things): Actually, that
    is a great idea – the pound and the kiwi are massively misaligned by
    historical measures. GS says New Zealand’s central bank will raise rates
    more slowly than markets think. The Bank of England will tighten more,
    by 300 basis points by late 2011."

    http://tinyurl.com/ygc3y5m
    Although I agree the Kiwi has massively appreciated against the pound as have the other commodity currencies so pound could be due a bouce. I disagree (yes thats right disagree with Goldman Sachs) with some of the reasoning behind this.

    Public debt in Britain will reach 90pc of GDP by 2011 and rates agencies including Fitch have given indications that they will cut British debt froms it higly valued AAA rating if no clear method is given how the public debt will be tackled, and so far neither party has really come up with anything substantive.
    In this election year I also find it highly unlikely that both monetary and fiscal policy will be strongly tightend at the same time and the direction has been leaning towards cutting spending and raising taxes to tackle debt. If British debt becomes garbage so does the pound, inflation is also not that much of a concern so rates do not have to be hiked in that respect with alot of market commentary (Ambose evans Pritchard himself) focusing on deflation being more likely.

    And from what I read it seemed Bollard indicated he was going to raise interest rates sooner rather than later, possibly even march this year although there isn't much cause to worry about inflation in NZ at this point either really.

    http://www.bloomberg.com/apps/news?p...d=aDRT5YUKjTu4

  8. #8
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    Too much pessimism built into the pound IMHO. Which paper currency is the least worst? Seems like GBP could be a likely candidate for that dubious honour as more bad news coming out of Europe lately.

  9. #9
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    my thoughts on GBP-NZD fwiw - incomplete count but you get the idea. Due a bounce.


  10. #10
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    Great chart, Edwood!

    The original question concerned the long term direction of the GBP/NZD. To give a view on that, one needs a view on the long term prospects for the British and NZ economies.

    Too hard for me!


  11. #11
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    Quote Originally Posted by macduffy View Post
    Great chart, Edwood!

    The original question concerned the long term direction of the GBP/NZD. To give a view on that, one needs a view on the long term prospects for the British and NZ economies.

    Too hard for me!

    hey MacDuffy - cheers
    yeah I couldn't see an 'active trades' thread for GBP-NZD? Hoep you don't mind if I post shorter term stuff here...

    To answer the original question >> you'd have to think there will some reversion to mean in future. GBP has been oversold in my mind, kiwi (and AUD for that matter) have benefited and at some point GBP will come back to life. Exactly when that is - who knows?

    I am in the double-dip camp at a macro level and expect we'll see another major sell off before too long (it may have already begun) and kiwi will get dumped in the process. But if the fundamentals in the UK don't improve then there's no reason for NZD to stay down for long.

    A change of govt in the UK would be a great start!

  12. #12
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    kiwi caught a bid - if global markets play ball we may be back into the 2.22's. should be a good sell around there....

  13. #13
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    hi ed, heres my count, i reckon we should get a rally to around wave 4 area for a great short.

    ending diagonal has broken out with a reverse head shoulders suggesting retracement

    underway.

    38.2 retracement nails the top of the 4th wave , so i will be waiting around 44.50 for a

    reversal pattern.


  14. #14
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    Hi DB

    I have something similar

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  15. #15
    action-reaction arco's Avatar
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    GBPNZD

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