AUDNZD - Five Year Lows

[peat]

Did anybody read this?

yes I always read Rodney's free stuff. He sure wont get a job back in the RBNZ anytime soon. heheh.

Regarding this thread topic, I tend to have a long term faith that the Aussie $ will overall be more robust than our one, simply due to the overall size and breadth of their economy though they did become (like us) too dependent on a particular sector. Not a trading strategy though.
Technically after a massive decline I see a bullish gartley on the AUD/NZD cross rate at the weekly view.

Attachment 8215

[Hoop]

No Hoop - he shouldn't be cutting. Only creating a bigger bust one day

The market credit is automatically tightening to the point of inverting the yield curve...The Central Banks around the world have probably caused this problem starting a few years back but that's another story..

Today we have in NZ a risk free instrument offering a higher rate than a more risky instrument..and you Winner want it see this situation being more exaggerated..

From what I've been taught..this situation diverts credit away from the longer time period end of maturities e.g business loans and mortgages etc, creating a credit squeeze...and an economic slowdown... some say enough to cause recessions...

Some might say this is what's needed to halt the property market boom and the probably the Equity market boom as well...but creating a credit squeeze when a market is perilously overvalued is like using a sledgehammer to crack a nut...it can cause a crash...This is the last thing that anybody wants to see happen..Joe and Jane Public may like to see property prices fall (for the moral good), but that would create a period of deflation which is the last thing the NZ economy wants or can afford....Would it solve Mr Wheelers frustration over a high dollar..maybe, maybe not...it depends on the flight to quality

With many gauges pointing in the Red Zone and a Government breathing down your neck over the property bubble .. it's may not a good time to be a Reserve Bank Governor..methinks

[JBmurc]

Asked then for a clear signal: will you do whatever it takes to stop inflation expectations dropping, including, if it was required, consider dropping interest rates to zero?

His answer could not have been more empty. "Let's see how the future unfolds."
--Graeme Wheeler

[winner69]

Jb - you must hate it every time Wheeler wantsvto say something

Xrate breaks thru 95 ...yippee


The New Zealand dollar rose ahead of a speech by Reserve Bank governor Graeme Wheeler which may hint at the timing of further easing, with at least one further cut expected this year.
http://www.sharechat.co.nz/article/0...prospects.html


Traders have him sussed

[Hoop]

Jb - you must hate it every time Wheeler wantsvto say something

......Traders have him sussed

With the NZ$ being the 10th most traded currency at approx $105billion turnover a day....Traders are probably saying "Who's Wheeler?"

[Daytr]

I see Citibank is calling for parity, I imagine the RBNZ will step in if we start getting close.
They are slowly starting to run out of ammunition tho on the rates side of things and with housing already out of control they will be wary of lowering rates too much. With so much money pouring in from overseas its going to be hard to combat and its not all about yield, its also being fuelled by immigration.

[winner69]

I see Citibank is calling for parity, I imagine the RBNZ will step in if we start getting close.
They are slowly starting to run out of ammunition tho on the rates side of things and with housing already out of control they will be wary of lowering rates too much. With so much money pouring in from overseas its going to be hard to combat and its not all about yield, its also being fuelled by immigration.

Parity - that be good

Says the country is generally doing pretty well

[Hoop]

Parity - that be good

Says the country is generally doing pretty well

Agree................and performing better than Australia for a wee while now so NZ should be closing the gap and if NZ keeps performing better than OZ then parity should be reached and overtaken.....Good too is, in global money terms NZ is also closing the wage gap.

[Valuegrowth]

One by one, there are lot of theories are coming to the market.

http://www.businessinsider.com.au/cb...-aussie-2016-8

CBA: Cows could herd the New Zealand dollar towards parity with the Aussie

I expect beginning of major weakness in these two currencies against USD sooner than later. Despite some slow depreciation against USD still they have some strength.

[JBmurc]

Average Australian household income is nearly 20k (20%) AUD higher than here in NZ... thinking parity mean NZD'er are doing better doesn't stack up ....yes we are chasing the aussies Debt to household incomes ....