To ensure future weekly updates get to your
inbox, please add: @moneycorp.msgfocus.com to
your safe list or email address book.
The NZD - New Zealand Dollar weekly update 30 Jun 2008
In this week's
update: Another round of risk-aversion?
- UK mortgage approvals slump
- NZ economy goes into reverse
From last Monday's $2.5850 opening the Pound climbed steadily to $2.6350 before falling back on Thursday. It consolidated on Friday and opened in London this morning at $2.61.
The week's economic data were not particularly helpful to Sterling. Its saving grace was that figures from elsewhere were almost equally as lacklustre. The highlight - if a negative figure can be referred to as such - was the CBI Distributive Trades survey. After the previous week's unbelievably strong Retail Sales performance the market was ready for a burst of harsh reality from the shopkeepers. Forecasters were going for a 16 reading so when it turned out to be only 9 there was a degree of relief.
Rather less satisfactory was mortgage activity among BBA members. The Independent was perhaps exaggerating when it said "the number of mortgages approved for house purchases slumped to an all-time low." It would be a surprise if the figure had not been lower in, say, 1914 or 1939. Yet the point was well made that, compared to a year ago, fewer than half as many people are buying. According to the BBA, "only remortgaging business is holding up, where people need or want to take advantage of deals with other lenders." Scant consolation when there are 15 sellers for every buyer.
Bank of England Governor Mervyn King was slightly less gloomy than usual during his Q&A session at the parliamentary Treasury Committee. He repeated his story about inflation rising above 4 per cent by the end of the year but was evasive about what might happen to interest rates. The media and the market were left guessing and failed to come up with any firm conclusion.
The New Zealand Dollar, like the British Pound, made headway against a suffering US Dollar over the week. With market attention focused on interest rates decisions in Washington (stuck at 2 per cent on Wednesday) and Europe (Euro rates are expected to rise on Thursday) the Kiwi offered little excitement to attract attention away from the Big Two. It managed fleetingly to do so but for the wrong reasons. First quarter GDP growth was negative, to the tune of 0.3 per cent, the May balance of trade was in deficit and building permits slumped by more than 40 per cent after an equally implausible 80 per cent increase in April.
New Zealand's economy is evidently no more recession-proof than those of the United States or Britain. The outlook is well short of rosy and it looks ever more likely that the next move for NZ interest rates will be, as suggested by the Reserve Bank earlier this month, downwards. There are no significant data this week to change that perception so the Kiwi will have to stew quietly until the next figures offer a new suggestion.
With investors now starting to worry again about equity markets and risk the Australian and Kiwi Dollars could be about to suffer from another bout of risk-aversion. The strong performance of the Japanese Yen last week highlights this possibility. Buyers of the NZ Dollar should hold their fire. A Sterling sell-stop order should provide sufficient protection to dodge any unanticipated sell-off for the Pound.
For more information and expert guidance on the currency markets, call Moneycorp today on +44 (0)20 7589 3000. Alternatively go to www.moneycorp.com where you can open a free, no obligation Trading Facility.
TTT Moneycorp Limited has been certified
to ISO 9000 Quality Assurance since 1996
Moneycorp is a trading division of TTT
Moneycorp Limited. This publication has been provided for general
information only. Neither TTT Moneycorp Limited nor any person
involved in this publication accepts any liability for any loss or
damage whatsoever that may directly or indirectly result from use
made of any opinion, information, data, representation or omission,
whether negligent or otherwise contained in this publication.
None of the information contained in this email
constitutes, nor should be construed as Financial Advice. Copyright
2005 TTT Moneycorp Limited.
This email and any attachments
are confidential and may be privileged and are intended solely for
the use of the named recipients. If you are not the intended
recipient, it is prohibited and may be unlawful to use or copy this
email for any purpose or disclose its contents. The views expressed
may not be the views of TTT Moneycorp Ltd and should not be relied
upon. If you have received this communication in error, please
notify TTT at disclaimer@ttt.co.uk
immediately by email or by telephone (+44 20 7823 7700) before
deleting it. Please be aware that emails and attachments may contain
viruses. Thank you for your co-operation.
TTT Moneycorp
Limited is a company registered in England under registration number
738837. Its registered office address is 2 Sloane Street, London,
SW1X 9LA.
To unsubscribe yourself from this mailing list please
follow this link
[*track.css*]
[*track.hidden*]
