The Kiwi is the world’s 10th most traded currency.
Every day up to NZ$140 billion is traded. Currency traders, every minute, 24 hours a day, are holding a referendum on New Zealand.
It matters. A significant part of the recent rise in petrol prices is the fall against the US dollar.
On 25 August the Kiwi began falling against all 17 currencies monitored by the Reserve Bank. With New Zealand far from international conflict and exports strong, the Reserve Bank and Treasury had predicted the Kiwi would rise.
What happened on 25 August?
The Herald published its poll of polls showing Labour, the Greens, TOP and Te Pāti Māori winning government.
The world began dumping the Kiwi.
The Kiwi fluctuates, but the trend is clear.
The Greens say the rich will pay. Even before they move into the Beehive, we are all paying. The Kiwi has already lost nearly 6% against the US dollar.
Then there is the bond market.
In Britain, Liz Truss introduced a budget the bond market considered unsustainable. Interest rates rose. Her government famously had a shorter shelf life than a lettuce.
The bond market will decide whether a Labour–Green–TOP–Te Pāti Māori government is fundable.
New Zealand is already borrowing to pay its bills. A government promising billions more in spending must find someone willing to lend.
Would you lend money when Chlöe Swarbrick is making spending decisions?
With a floating currency, there is no floor beneath the dollar. Nor is there a ceiling on interest rates.
A Hipkins-led Labour–Green–TOP–Te Pāti Māori government would have the shelf life of a bottle of milk.
The Honourable Richard Prebble CBE is a former member of the New Zealand Parliament. Initially a member of the Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996, becoming its leader from 1996 to 2004. This article was sourced HERE
On 25 August the Kiwi began falling against all 17 currencies monitored by the Reserve Bank. With New Zealand far from international conflict and exports strong, the Reserve Bank and Treasury had predicted the Kiwi would rise.
What happened on 25 August?
The Herald published its poll of polls showing Labour, the Greens, TOP and Te Pāti Māori winning government.
The world began dumping the Kiwi.
The Kiwi fluctuates, but the trend is clear.
The Greens say the rich will pay. Even before they move into the Beehive, we are all paying. The Kiwi has already lost nearly 6% against the US dollar.
Then there is the bond market.
In Britain, Liz Truss introduced a budget the bond market considered unsustainable. Interest rates rose. Her government famously had a shorter shelf life than a lettuce.
The bond market will decide whether a Labour–Green–TOP–Te Pāti Māori government is fundable.
New Zealand is already borrowing to pay its bills. A government promising billions more in spending must find someone willing to lend.
Would you lend money when Chlöe Swarbrick is making spending decisions?
With a floating currency, there is no floor beneath the dollar. Nor is there a ceiling on interest rates.
A Hipkins-led Labour–Green–TOP–Te Pāti Māori government would have the shelf life of a bottle of milk.
The Honourable Richard Prebble CBE is a former member of the New Zealand Parliament. Initially a member of the Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996, becoming its leader from 1996 to 2004. This article was sourced HERE
3 comments:
Thank you for pointing out who really runs the country. The parties can argue about fringe issues but it is the international bankers that decide all real policy.
But to attribute the kiwi's variation to the leading parties is nonsense. The bankers know they can control whomever gets into power. Whoever does not play the game gets Trussed.
No it is the carry trade. The old basis trade was to borrow in yen and buy NZ government bonds. A few years ago the spread was over 5%. Now it is 1.5%. Japan has put up its rates and NZ cut its rates until recently.
The decisive factor was the 28th August Jackson hole speech where Warsh made it clear her would raise USD rates. Traders new they would get a better basis trade out of borrowing in Yen and buying treasuries so they started unwinding their NZ purchases.
They could not care less about NZ politics.
I despair when i think of the number of Green, TPM, Labour voters in this country. How can so many be so unintelligent, so uninformed?
I have been monitoring the NZD against the USD and the ZAR for quite a while(over a year). The NZ against the ZAR was always strong, but not now. Not sure if the announcement about the Left winning the election is the cause.
New Zealand is in a bad way economically. That's why it's important for every person to get involved.
We can't afford to keep looking inward and trying to appease all these "clown policies and parties".
Note: most of our so-called Socialist seem to end up with accumulated wealth.
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