AUDNZD - Five Year Lows

[Hoop]

Well well - hit 0.94 - not a surprise

Those bank economists/commentators still forecasting low 80's - hmm

One month later and it is 0.9625.
Hamish & Fred Dagg (from the NZR thread)...An example of how not to put all your total faith/money with Economists/Commentators/Financiers and Brokers forward projections.
A real worry is the interest rate curve is inverting again..(a perceived recessionary view by markets if inversion not corrected)

The 5yr swaps is OCR is 2.25 3M Bills 2.42 5Yr Swaps 2.29% 10 yr swaps 2.61
From RBNZ website the next review is 11th August (over 2 months between periods this time) which is a still long way away..

Hmmmm..question.. ..Mr Wheeler is there going to be a Official Cash Rate drop happening before the scheduled 11th August announcement date??

[winner69]

OMG, just heard Cam Bagrie of ANZ on the radio that the nzd and aud will equal sometime in the next year

Simple really - the cross rate driven by relative economic performance across the 2 countries. NZ continuing to do well and AU facing headwinds, now more apparent with the political uncertainity

Good to see my mate Cam realising this - wonder if the banks will stick to the low to mid 80's forecasts they seem to have at present.

Message is clear - the NZD is not overvalued

[Hoop]

Message is clear - the NZD is not overvalued

My view is a long term strong currency is a sign of a healthy, stable environment and a growing economy...gotta go now.. need to find a piece of wood to touch.

[winner69]

Message is clear - the NZD is not overvalued

My view is a long term strong currency is a sign of a healthy, stable environment and a growing economy...gotta go now.. need to find a piece of wood to touch.

Right on mate - a strong dollar we should be proud off

You have to wonder why 'gurus' love the purchasing power parity approach

[Hoop]

Right on mate - a strong dollar we should be proud off

You have to wonder why 'gurus' love the purchasing power parity approach

...the purchasing power parity approach...

???..do you mean the sudden attraction to implement a different form of easing such as "helicopter money"...like giving everyone a tax refund /tax break incentive or depositing $1000 dollars into everyone's bank account, so to kickstart the economy (prevent deflation) using "from the ground up" method by increasing purchasing power of the people?................towards parity?... to match the well used conventional "trickle down" methods such as lowering interest rates, increasing liquidity and other forms of monetary easing ??

Yeah..its getting a bit hard (especially in the EU) to kick start growth by lowering interest rates (easing liquidity) when the rates are already in the negatives. It seems monetary easing in these sorts of financial environments loses some of it's potency..Apparently the negative rates are creating other problems Insurance Companies and the Banks are finding it tough going.

....so...I guess looking at other more unconventional options of kicking growth is understandable

I see Finland were thinking about this last year... swapping from traditional benefits distribution to helicopter money..The saving in administration costs would be so huge that they could afford to give money (800 Euros a month) to every individual that are of Finish citizenship..

I'm not sure about the effects this has on a Country's currency

[winner69]

Goodness gracious me - Westpac bank guys woken up -

We see scope for further gains to the 0.98-1.00 area during the month ahead. Geopolitical uncertainty should affect the AUD more than the NZD, and the market is losing confidence in an August cut from the RBNZ.


Still trying to work out why the variance to their 'fair value model' is so high - th model says it shoul be 86 cents

[Hoop]

I see the recent interest rate drop didn't see the Aussi$ tumble longer term ..it seems to have strengthened a bit..
Maybe the people are now seeing that lower interest rates may help the economy become stronger + equity markets and equalising with other currency with similar interest drops... thereby not always mean "a drop in interest rate = a drop in currency" in the longer term....The currency should reflect the health of that Nation

Let's see what happens to the NZ$ next week...Mr Wheeler has left things very late..the market is inverting and the 5yr swaps are at 2.08%..

Crikey!!! the market is telling us the OCR would not look out of place at 1.75%...The present 2.25% level looks very out of place now.

..It seems the RBNZ has it's tits in a tangle over John key's criticism and the media leak, they have gone "dark"..Not showing their intentions to give markets some sense of certainty and time to slowly correct is foolish in my opinion..Where is the Janet approach?...

Next week...The market is expecting the OCR to be cut by 0.25% to 2.0%...It wouldn't surprise me to see a 1.75% bombshell hit the markets...but I'm a pleb and my opinion is useless and worth nothing..

[kiora]

I see the recent interest rate drop didn't see the Aussi$ tumble longer term ..it seems to have strengthened a bit..
Maybe the people are now seeing that lower interest rates may help the economy become stronger + equity markets and equalising with other currency with similar interest drops... thereby not always mean "a drop in interest rate = a drop in currency" in the longer term....The currency should reflect the health of that Nation

Let's see what happens to the NZ$ next week...Mr Wheeler has left things very late..the market is inverting and the 5yr swaps are at 2.08%..

Crikey!!! the market is telling us the OCR would not look out of place at 1.75%...The present 2.25% level looks very out of place now.

..It seems the RBNZ has it's tits in a tangle over John key's criticism and the media leak, they have gone "dark"..Not showing their intentions to give markets some sense of certainty and time to slowly correct is foolish in my opinion..Where is the Janet approach?...

Next week...The market is expecting the OCR to be cut by 0.25% to 2.0%...It wouldn't surprise me to see a 1.75% bombshell hit the markets...but I'm a pleb and my opinion is useless and worth nothing..

0.5% cut would be nice for our exporters,even necessary

[winner69]

0.5% cut would be nice for our exporters,even necessary

......assuming the NZD drops - lately doesn't seem to do what Wheeler thinks it should does it?

(And yes Wheeler is being sucked in by bank economists to make drastic cuts - ASB even suggesting 1.5%. Cuts only add to current economic boom and creates a mega-boom and what followsa boom?)

[Hoop]

......assuming the NZD drops - lately doesn't seem to do what Wheeler thinks it should does it?

...Cuts only add to current economic boom and creates a mega-boom and what followsa boom?)

A Kaboom?..

Kiora...Do not wish for a lower NZ$, it may come true...It may seem nice for an Exporter on paper, but in reality it ain't..

Look at the "recent" times when our dollar was low.. 1984/6 .. 1992/3.. 2001/2.. 2008/9..

2008/9 was mild to the general public in NZ and didn't affect most people too much apart from the retirees...Unfortunately most younger people think the 2008 GFC was the worst recession ever and it didn't affect them so they assume no problems for the future recessions..eh?

...In reality earlier recessions were a lot worse for NZ ..Ask any Oldtimer Tradie what it was like in 1992 and 2001...very ugly times.

When were those periods when our NZ$ were at their lowest value?..,,Yep when NZ had financial/economy problems combined with personal hardship which included exporters..