AUDNZD - Five Year Lows

[Bobcat.]

Our currency has plummeted over the past two months from 77.34 (April 28) to now 66.70 on its cross with the USD. That's 10.64 / 77.34 =13.7%. Against the Pound it's even more = 1.946 to now 2.336 = .4 / 1.946 = a whopping 20% !! ..in just two months.

This is not Greece. Our currency is getting way oversold now. I've just loaded up my FOREX reserves to come in strong on any sign of a rebound, and with a cheeky bid in at 66.50.

[Joshuatree]

Against the Aussie we have dropped from re 99.7c to 87.7c in re a month , thats a 12 % change!!. Sure makes all my aussie shares look good on paper though; turbo charged..

[JBmurc]

Against the Aussie we have dropped from re 99.7c to 87.7c in re a month , thats a 12 % change!!. Sure makes all my aussie shares look good on paper though; turbo charged..

I'm gutted to not have sold our house round this time many were dreaming of parity ...would have put a good chunk of funds into AUD

[Bobcat.]

Time to move some money back across the ditch me thinks, JT...even if it does mean feeding the coffers of banks charging exorbitant fees via their FOREX spreads. ANZ for example has the audacity to state on their FOREX contract note 'transaction fee = zero" . They must think we're idiots. Their hidden fees amount to almost 2%.

[Daytr]

Try NZ Forex BC, I think their spreads are fairly tight comparative to the banks.
I wouldn't be surprised to see the NZD go to 1.18 over time.

Cheers Daytr

[Bobcat.]

I've just come in on the AUD/USD at 75.14. It's plummeted this afternoon after both disappointing Retail Sales figures and a lower than forecast Chinese Services PMI. Expecting a decent rebound to somewhere around 76c tomorrow morning.

The AUD/NZD cross has also fallen a lot over the past 24 hrs, and IMO will continue to trend down over the next few weeks closer to 1.10.

Discl: Long now on the Kiwi and Aussie both against the USD.

[Daytr]

I hope you are right BC as I'll jump back in.
Steven Topliss economist at BNZ came out yesterday saying NZs chances of going into recession have increased & I agree with him, although the much lower NZD may save the day.

[winner69]

I hope you are right BC as I'll jump back in.
Steven Topliss economist at BNZ came out yesterday saying NZs chances of going into recession have increased & I agree with him, although the much lower NZD may save the day.

With the likes of Topliss and Bagrie influencing things so much is Wheeler almost irrelevant (or redundant)

Pity we are talking our way into recession territory

For once Key seems the only sensible one at the moment

[Hoop]

Yes recession risk increases...A tell tale sign is the inverting of the yield curve..

Back in March there was a trending move towards an inverted yield curve. With the RBNZ interest rate cut that trending move was eliminated.....Now this trending is back..with the 5y Swap very close to causing a partial inverted yield curve event.

The option to eliminate the inversion threat is drop the short term rate again and again in an effort to keep it lower than the falling long term rates.


Todays table shows a big drop....

NZ OCR	3.25
10y Swap	3.87	-0.06		-1.53%
3m Bank Bill	3.18	-0.04		-1.24%
5y Swap	3.30	-0.06		-1.79%

[Daytr]

I would suggest burying your head in the sand as Key basically has this morning is hardly sensible. I loved this bit. "Yes dairy prices are down a little bit" LOL
There are obvious risks to the NZ economy right now & they should be respected & acted upon.
Why do you think the RBNZ has been lowering rates? They can see the same.
You can't expect things like dairy prices to get absolutely smashed & not have a reasonable negative impact on the economy.
And now we have external factors such as China & Greece adding to the mix.
NZ as an export led economy relies on global growth & global consumption.
The problem for Key is, it doesn't suit his plans for the 2017 election of having the budget back in surplus.
He's borrowed to the hilt since he has been in power & now he may have to start spending more, meanwhile the tax take is likely to take quite a hit.
More debt.
I hope they are wrong & the BNZ was saying recession is a more likely chance not the probable prognosis.